BP spillage spells woe for UK income seekers

The oil spill in the Gulf of Mexico is a huge problem for investors in the UK, as BP shares are held in virtually every UK portfolio, either knowingly or, in the case of pensioners and endowment holders, perhaps unknowingly.

The costs associated with this environmental disaster are mounting fast, but may pale into insignificance when compared to the costs of litigation and compensation that will inevitably follow. This drain on BP’s cash reserves has prompted a call for the company to cut its dividend. Although it seems unlikely this need happen, BP’s plight brings into sharp focus the difficulties facing investors who are looking to generate an income from shares in the UK. By the end of 2009, the percentage of the total dividends available from the UK stock market that were paid by just the top 10 dividend...