According to a recent report, member companies of the UK’s elite FTSE 100 index are set to pay out £88bn in dividends in 2026. And a big chunk of this powerful passive income comes from Britain’s biggest banks, energy companies, and biopharma firms.
Delightful dividends
What are dividends? They are regular (or one-off and special) cash payments paid by businesses to their shareholder owners. Most London-listed companies don’t pay out dividends, because some are loss-making. Others prefer to reinvest any profits into future growth.
The good news is that almost all FTSE 100 firms pay dividends — and some of the UK’s biggest businesses pay out enormous amounts of cash. Alas, future dividends are not guaranteed, so they can be cut or cancelled at short notice. Even so, Footsie dividends are my favourite form of passive income, as well as the closest thing to ‘free money’ I know.
Dividend dynamos
It’s important to note that FTSE dividends are highly concentrated. Indeed, just 10 companies are expected to pay out £45.7bn in 2026 — more than half (51.9%) of the forecast total of £88bn. Furthermore, the top 20 FTSE 100 firms could account for almost £60.8bn — seven-tenths (69.1%) of the total.
Thus, investors who don’t own shares in these dividend dynamos might be missing out on a cascade of cash. For the record, these five firms are expected to be the London market’s biggest dividend payers in 2026:
1. HSBC Holdings (LSE: HSBA): £10.7bn
2. Shell: £6.3bn
3. British American Tobacco: £5.3bn
4. Rio Tinto: £4.3bn
5. BP: £3.9bn
Expected dividends for 2026 from these five ‘dividend dukes’ comes to £30.5bn — more than a third (34.7%) of the total. My family portfolio already owns two of the above (Rio Tinto and BP). But what if I’m losing out on potent passive income by not owning more of these ‘cash kings’?
Huge HSBC
As my above list shows, FTSE dividends don’t get much bigger than the £10.7bn on offer to HSBC shareholders this calendar year. HSBC — formerly The Hongkong and Shanghai Banking Corporation — has origins dating back to 1865.
Despite being listed in London, HSBC is a powerhouse in the Far East, Hong Kong, and mainland China. Today, it serves around 41m customers across 56 markets. What’s more, it employs the equivalent of over 211,000 full-time employees worldwide. At end-2025, HSBC had customer deposits of $1.8trn, while total assets exceeded $3.2trn. In short, HSBC is a global Goliath.
On Friday, 17 April, HSBC shares closed at 1,365.2p, valuing the bank at £234.8bn. Currently, its dividend yield of 4.1% is over a percentage point above the FTSE 100’s cash yield of 3% a year. Also, its shares are up 73% over one year and 225.1% over five years. Happy times for HSBC’ shareholders indeed.
I would buy HSBC shares in a heartbeat, but for two things. First, my family portfolio already owns large stakes in two other UK banks. Adding another bank to our holdings would reduce our diversification and increase concentration risk. Second, any military confrontation between superpower China and Taiwan (or another nation) could one day prove disastrous for Far Eastern businesses.
Therefore, I shall keep looking elsewhere for more of the cash colossuses that I love for passive income!
