This information on its own means very little but further into the article it explains that UK firms increased their dividends by 25% on 2011. That is the equivalent of my salary increasing 25% on last year, the interest rate on my cash account increasing by 25% last year, or even my fixed pension increasing 25% on 2011. However, in these examples nothing of the sort happened.
When you take into account extraordinary items for 2011, the increase is only 6.6% still double the published rate of inflation in Italy (3.3% by ISTAT) for 2011. What is equally amazing is that in 2011 dividends had risen 12.8% on 2010. So in 2 years your income stream from your investments would have increased by a phenomenal (25 + 12.8) 37.8%. That is over 10 times the rate of inflation.
So whilst you may be wondering how you are going to cope with rising oil prices, electricity and gas, benzina and food prices because your income is only increasing in line with the published rate of inflation or below, there is a solution: Shares in companies who are increasing their dividends (or to minimise your risk, a fund which does the job for you).
** NB, Investing in shares means that your underlying capital will fluctuate in line with the markets and carries its own set of investment risks. ***
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