One of the biggest threats to building long-term wealth is inflation. Even if a portfolio generates regular income, rising prices can slowly erode its real value. That’s why I keep a close eye on UK shares that not only pay decent dividends but also grow those payouts at a rate well above inflation.

In the long term, dividend growth can be more important than the yield. With UK inflation falling back towards the Bank of England’s 2% target, a dividend growing at 5% or more a year should comfortably stay ahead. 

Here are three under-the-radar UK shares that I feel are worth considering for inflation-beating income growth.

Howden Joinery

First on my list is Howden Joinery (LSE: HWDN), a kitchen and joinery specialist. It might not be the most glamorous company on the FTSE 100, but it’s been remarkably consistent.

Howden’s dividends have increased by an average of 10% a year over the past decade, well above UK inflation. It doesn’t have the highest yield, typically around 2.5%, but with a payout ratio that seldom tops 50%, it has plenty of room for further hikes.

On the valuation front, the shares trade at a forward price-to-earnings (P/E) ratio of about 17.6. That seems reasonable for a company delivering double-digit return on equity (23.6%) and solid free cash flow (£288m). 

Risk-wise, my main concern would be exposure to the UK housing market. If consumer confidence drops or housing transactions slow, demand for new kitchens could soften. Another is margin pressure from cost inflation, especially if it’s unable to pass higher costs on to customers.

But with a strong balance sheet and a decent cash pile, I think Howden’s well-positioned to keep rewarding shareholders.

Another stock I often feel is overlooked is Intermediate Capital Group (LSE: ICG). As a specialist asset manager focused on private debt and credit markets, it offers something different to traditional banks or insurers.

The company’s grown dividends at a compound annual rate of 14% a year for the last 10 years — while still maintaining a low payout ratio of around 55%. The yield typically floats between 4% and 5%, backed by a strong cash flow and a long record of beating earnings expectations.

The main risk is sensitivity to credit markets. A sharp downturn could lead to rising defaults in its loan portfolios. But with a diversified investment book and cautious leverage, I see it as a solid way to tap into alternative finance trends while enjoying inflation-beating dividend growth.

Rathbones Group

Lastly, Rathbones is a UK wealth manager with over £100bn in assets under management (AUM) and a respectable 5.3% yield. Ironically, 5.3% is also the average rate at which it’s been increasing its dividend for the past 15 years. Although earnings have been slow, cash flow is solid, sufficiently covering dividend payments by 2.86 times. 

Recently, the share price has soared, pushing its P/E ratio up to 29.5. That means the current price could be slightly overvalued. And since revenue’s market-linked, it’s at risk from downturns or geopolitical instability. 

Still, its strong growth and long dividend track record make it stand out as a reliable income stock.