Dividends paid from UK-listed companies are due to rise by an average of 11.5 per cent in 2011 on the previous year, according to research released today.

Analysts at Capita Registrars said dividends paid would reach £63 billion (US $100 billion) thanks to dividends being reinstated at companies and improved corporate confidence.

Among the good news is that BP is widely expected to reinstate dividends after the fall-out from the Gulf of Mexico disaster has died down, which will be music to the ears of many an equity income fund investor.

The stock was a contributory factor to the 3.3 per cent drop in dividend payments from UK companies on the London main market last year, although UK-listed businesses excluding BP increased their payouts by around 7.5 per cent.

A continued recovery in the banking sector is also expected to lift some of the gloom, with most fund managers projected to be able to satisfy their income requirements.

According to Capita, UK equities would still yield over 4 per cent in 2011 even if BP were not to renew their dividend.

Today’s news follows a similar report from fund ratings agency Standard & Poor’s last year which said managers are maintaining positions in UK companies despite the widespread view of increased opportunities outside the UK for income.

Speaking at the time, Peter Brunt, fund analyst at S&P Fund Services, added many companies cut costs to the bone in response to the credit crisis to maintain profit margins.