Irony abounds. Dividends, the lifeblood of the country’s retired and the long-term savings system, are under pressure from the Bank of England and paying them is being viewed as unpatriotic. Perhaps the Prudential Regulation Authority needs to be reminded that all banks and insurance companies are not created equally, and that many have and will continue to show resilience, require little subsidy and have adequate liquidity to make good on commitments to policyholders and still pay dividends.
Dividends are being tried in the court of public opinion and not being given a fair shake. We should all be conscious that the ultimate recipients of most of these payments are individuals, through long-term savings and pension funds. The retired, the most vulnerable group in society today, rely on these for income. Perhaps Andrew Bailey, governor of the BoE, should remind all of us the critical role dividends play in our long-term savings system.
London EC2, UK
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