Top UK Dividend Stocks of 2025

This guide outlines key factors to consider when hunting for high-yield UK dividend shares in 2025 as well as explore the biggest yields in the FTSE 350.

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Dividend stocks are shares that can provide investors with a steady stream of income. For those interested in passive income, investing in high-dividend-yield stocks can be a great option.

This guide will explain what high dividend stocks are, what to look out for when buying them, and some of the top UK companies in this sector.

What are high-dividend stocks?

A dividend stock is a company that distributes a portion of its profits to its shareholders.

Dividends are essentially a way that companies thank their shareholders for investing in them. The level of the dividend is set by a company’s board, and an investor receives a dividend for each share they own.

A high dividend stock, meanwhile, is a company whose yield looks enormous based on certain comparatives. The yield measures the level of a dividend by calculating it as a percentage of a stock’s share price.

Let’s say that a dividend stock trades at 100p per share. If analysts predict a 5p per share dividend for the current financial year, then the yield comes in at 5%.

There are various ways that one can judge whether a company is a high-yield dividend stock. A company’s yield can be compared to the average yield on offer from all UK shares. It can also be compared to the broader yield on an index (say, the FTSE 100) or to other companies within the same industry.

Inspecting 3 UK high dividend stocks

There is a lot more to consider when choosing the best income shares than simply what companies offer the biggest dividend yields. Fortunately, there is a huge selection of dividend stocks with large yields in the UK today. These three high-dividend yield stocks are all from the UK’s FTSE 100, and are some of the largest by market capitalisation as of April 2025.

Dividend stockMarket CapIndustryHQDescription
SSE (LSE:SSE)£16.6bnElectricityPerth, ScotlandAn energy producer with a focus on renewable sources
Barratt Redrow (LSE:BTRW)£5.7bnHomebuilderCoalville, EnglandOne of the UK’s largest builders of private and affordable homes
International Distributions Services (LSE:IDS)£3.5bnIndustrial TransportationLondon, EnglandThe UK’s oldest courier with a growing overseas footprint

SSE

Utilities business SSE has a long history of offering above-average dividend yields. As of April 2025, its annual yield sits at 4.1%%, ahead of the 3.9% average for all FTSE 100 shares.

On paper, SSE is a high dividend stock with some notable red flags. The capital-intensive nature of its operations means it has a lot of debt on the balance sheet.

However, the group’s leverage has been slowly falling over the years. And SSE provides an essential service, which means profits remain broadly stable during economic wobbles and dividends. This also gives it considerable cash flows to remain a high dividend stock despite those high debt levels.

SSE’s focus on wind energy could help it to deliver excellent shareholder returns as demand for low-carbon power takes off. SSE plans to increase its renewable output fivefold by 2030.

Barratt Redrow

Housebuilder Barratt Redrow is another dividend yield stock from the FTSE 100. Homebuilders like Barratt tend to have large profit margins. This means they generate lots of cash with which to pay large dividends. And in late 2024, the company used its financial flexibility to acquire Redrow, changed its name from Barratt Developments to Barratt Redrow, while also solidifying its position as the UK’s largest homebuilder.

A problem for Barratt is that its operations are highly cyclical. Demand for its newbuild homes could slump if economic conditions worsen, and dividends could suffer as a result. Rising interest rates have also damaged sales volumes and home prices, creating a headwind for this enterprise.

Yet, at the same time, long-term profits at Barratt could remain solid if Britain’s shortage of residential properties continues to drag on. Barratt builds homes of all types and sizes across the whole of the UK catering to a wide range of budgets. And with the UK government reforming the planning permission process to speed up home construction, the company might see demand improve even with elevated interest rates.

International Distributions Services

Courier International Distributions Services, formerly known as Royal Mail, can trace its origins all the way back to 1516, though its operations are changing rapidly in the digital age. Letter volumes has plummeted as email has taken over. Meanwhile, parcel volumes are soaring due to the emergence of e-commerce.

It’s important to note that Royal Mail’s payout ratio has fluctuated wildly and at high levels, too, over the past 10 years. This reflects the economically sensitive nature of its business, which affects earnings and the high costs of its ongoing modernisation programme.

Royal Mail generates the lion’s share of profits from its traditional British marketplace. The company is expanding rapidly through its GLS division, which operates across Europe and North America.

What to look for in high dividend yield stocks

There are two important numbers to pay special attention to when evaluating high-dividend shares: the yield and the dividend payout ratio.

Dividend yield

Dividend yield is the first thing one considers when selecting high-dividend stocks to buy. However, it’s critical to remember that forward dividend yields are based on a projection of the dividends that analysts believe a company will pay.

If a stock’s profits start to come under pressure, these dividend forecasts can suddenly look extremely fragile.

Furthermore, companies with extremely high dividend yields can sometimes prove to be investment traps. Their gigantic yields could be caused by significant share price falls, which in themselves might suggest that market participants expect profits to dive.

There are a few things to consider when assessing which high-dividend-yield stocks to buy in the UK. They can give you a decent idea of how realistic a company’s dividend projections appear. These include:

  • The level of dividend cover. This looks at how well a predicted dividend is covered by expected earnings. A reading of 2 times and above suggests that a company is in good shape to make the projected payout based on profits.
  • The strength of their balance sheet. Businesses with lots of debt may have to compromise on dividends to meet their financial obligations. Those with weak free cash flows may also struggle to pay decent dividends.
  • The nature of their operations. High dividend stocks that operate in defensive industries may be in better shape to shell out large payouts year after year than those in cyclical sectors. This is because they can theoretically expect profits to remain stable even during economic downturns. Utilities, telecoms providers and food producers are some examples of defensive stocks.

Dividend payout ratio

It’s also important to assess whether a high dividend stock can continue to pay decent dividends to its shareholders over the longer term. This is where the dividend payout ratio comes in.

The dividend payout ratio illustrates what a business is paying in dividends as a share of their profits. A stock that has earnings of 100p per share and pays dividends of 70p per share has a payout ratio of 70%.

There is no set rule as to what makes a decent payout ratio. However, stocks whose payout ratios suddenly jump — and shares that have payout ratios above 100% — can sometimes be extremely dangerous.

Which UK stocks pay the highest dividends?

As previously mentioned, high dividend yields can be a bit of a red flag. They can indicate unsustainability that could compromise a portfolio’s passive income-generating capabilities. However, there are always exceptions to this rule.

Therefore, it’s possible for investors to uncover some potentially lucrative opportunities when exploring the highest-yielding stocks in the FTSE 350. With that in mind, here are the best 25 UK dividend stocks in terms of yield as of April 2025.

CompanyIndustryDividend Yield
SDCL Energy Efficiency Income TrustClosed-End Investments13.67%
Harbour EnergyOil, Gas and Coal13.27%
Ithaca EnergyOil, Gas and Coal12.86%
NextEnergy Solar FundClosed-End Investments12.68%
Ashmore GroupInvestment Banking and Brokerage Services12.66%
EnergeanOil, Gas and Coal11.90%
Aberdeen GroupInvestment Banking and Brokerage Services11.27%
M&GInvestment Banking and Brokerage Services11.05%
Foresight Environmental InfrastructureClosed-End Investments10.90%
Diversified Energy CompanyOil, Gas and Coal10.71%
Foresight Solar FundClosed-End Investments10.67%
Apax Global AlphaClosed-End Investments10.28%
Phoenix Group HoldingsLife Insurance10.05%
TwentyFour Income FundClosed-End Investments10.03%
GCP Infrastructure InvestmentsClosed-End Investments9.96%
Bluefield Solar Income FundClosed-End Investments9.75%
Renewables Infrastructure GroupClosed-End Investments9.65%
Legal & General GroupLife Insurance9.38%
Greencoat UK WindClosed-End Investments9.37%
ZIGUPIndustrial Transportation9.28%
Sequoia Economic Infrastructure Inc FndClosed-End Investments9.15%
Ninety OneInvestment Banking and Brokerage Services9.14%
Taylor WimpeyHousehold Goods and Home Construction9.06%
Man GroupInvestment Banking and Brokerage Services8.31%
OSB GroupFinance and Credit Services8.29%

Which UK stocks pay monthly dividends?

Typically, businesses will only pay dividends to shareholders annually, semi-annually, or quarterly. This decision is entirely at the discretion of the management team, as is their ability to cancel dividends if needed.

However, what if investors want to receive dividends every month, similar to how fixed-income investors can receive coupons? In this scenario, investors can turn to mutual funds and exchange-traded funds.

There are several funds listed on the London Stock Exchange which are structured to pay shareholders dividends on a monthly schedule funded by their own investment portfolios.

As of April 2025, this list includes:

NameFocus
TwentyFour Select Monthly Income FundClosed-End Investments
Global X SuperDividend UCITS ETFGlobal Equity
JPM Global Equity Premium Income UCITS ETF – USD (dist)Global Equity
Global X Nasdaq 100 Covered Call UCITS ETFNorth American Equity
Global X S&P 500 Covered Call UCITS ETFNorth American Equity
JPM Nasdaq Equity Premium Income Active UCITS ETF – USD (dist)North American Equity
JPM US Equity Premium Income Active UCITS ETF – USD (dist)North American Equity
JPMorgan USD Ultra-Short Income UCITS ETF – USD (Dist)Fixed Income
JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF GBP Hedged (dist)Fixed Income
JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF – USD (Dist)Fixed Income
JPMorgan GBP Ultra-Short Income UCITS ETF – GBP (Dist)Fixed Income
JPMorgan BetaBuilders UK Gilt 1-5 UCITS ETF – GBP (Dist)Fixed Income
PIMCO Sterling Short Maturity UCITS ETFFixed Income
PIMCO US Dollar Short Maturity UCITS ETFFixed Income
PIMCO US Short-Term High Yield Corporate Bond Index UCITS ETFFixed Income
PIMCO US Short-Term High Yield Corporate Bond Index UCITS ETF EUR Hedged DistFixed Income
PIMCO US Short-Term High Yield Corporate Bond Index UCITS ETF GBP Hedged DistFixed Income
PIMCO Emerging Markets Advantage Local Bond Index UCITS ETFFixed Income
Vanguard U.K. Gilt UCITS ETF (GBP) DistributingFixed Income
Vanguard EUR Corporate Bond UCITS ETF (EUR) DistributingFixed Income
Vanguard EUR Eurozone Government Bond UCITS ETF (EUR) DistributingFixed Income
Vanguard USD Corporate Bond UCITS ETF (USD) DistributingFixed Income

Are high dividend shares right for you?

High dividend yield stocks could be a good option for UK investors who are looking to build a healthy second income and for those who are looking to become financially independent.

If you invested £2,400 in high dividend shares yielding 5%, you’d have £120 in secondary income in the first year. In the second year, you’d hopefully continue to receive dividends from these shares, as well as dividends from any new stocks you’d bought. And so on.

The income flows that these high-yielding shares can significantly boost one’s wealth levels over the long term. Buying dividend shares is a popular way that people try to build a passive income (this is a steady stream of cash that requires no day-to-day activity). If you’re looking for a more passive style of building wealth, investing in high-dividend shares could be a good option for you.

This article contains general educational content only and does not take into account your personal financial situation. Before investing, your individual circumstances should be considered, and you may need to seek independent financial advice.  

To the best of our knowledge, all information in this article is accurate as of time of posting. In our educational articles, a "top share" is always defined by the largest market cap at the time of last update. On this page, neither the author nor The Motley Fool have chosen a "top share" by personal opinion.

As always, remember that when investing, the value of your investment may rise or fall, and your capital is at risk. 

Royston Wild has positions in Barratt Redrow. The Motley Fool UK has recommended Barratt Redrow. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.