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Footsie dividend shares are set for bumper money payouts in 2025. And the index may be on for a brand new annual report for share buybacks.
That’s what the newest outlook from AJ Bell‘s Dividend Dashboard says. Aggregated from inventory market analysts, forecasts point out £79.4bn in FTSE 100 dividends this yr. And with the index additionally up 17% to date in 2025, I feel it’s honest to name it an awesome yr for UK traders.
Share buybacks assist increase costs, as they carry future per-share measures like earnings and dividends. And with £50.9bn introduced by the tip of September, the all-time report of £58.5bn — set final yr — is in sight.
Add the anticipated dividends and buybacks, and we’re round £130bn in whole FTSE 100 shareholder returns in 2025. That’s 5.5% of the overall worth of the index. Who desires all their cash in a Money ISA when one thing like that is on provide? Not me, that’s for positive.
Match the index
The 2025 outlook suggests a simple strategy to long-term investing. That’s to think about an index tracker. We may purchase shares in, say, iShares Core FTSE 100 UCITS ETF — which is easier than its massive identify would possibly sound. It simply tracks the index with the goal of matching its development and dividend returns.
It’s nonetheless open to basic inventory market threat, and unhealthy years could be simply as unhealthy as the entire market. I additionally assume traders ought to contemplate different related exchange-traded funds managed by totally different corporations — simply to diversify in that path too.
However as a approach to make investments some cash within the inventory market after which sit again for the long run — with no head-scratching or poring over monetary experiences — it might be exhausting to beat.
Beat the index?
Many traders have extra time to spare, and we wish to attempt to do even higher than the cracking index efficiency I described above. In my case, I deal with sectors I feel can generate robust long-term money circulation. I fee insurance coverage as a key favorite.
I maintain Aviva shares, however I’m additionally contemplating including Authorized & Common (LSE: LGEN) to my Shares and Shares ISA. The share value has been comparatively flat for the previous few years. However we’re a hefty 9% forecast dividend yield.
Dividends aren’t assured. And the insurance coverage enterprise will be one of many Footsie’s extra risky sectors. However AJ Bell factors out that we haven’t seen a dividend lower from L&G previously decade.
Cowl and forecasts
I’m a bit involved that forecast earnings for this yr fall wanting the expected dividend. However with earnings anticipated to develop strongly within the subsequent few years, my concern’s muted.
At interim time, CEO António Simões stated: “We’re delivering on our promise to return extra to shareholders with over £5bn in dividends and share buybacks over three years.“
Volatility — of earnings and share value — nonetheless must be the primary threat. However I feel traders eager to maximise their share of FTSE 100 dividends ought to undoubtedly take into consideration Authorized & Common.
