Our free dividend income calculator shows how much you need to invest to hit a target dividend income. Set your yearly or monthly goal below, choose which UK shares and funds to include and it works out the amount to invest.
Dividend Income Calculator
Find out exactly how much you need to invest in UK stocks and funds to hit your target dividend income.
| Company ↑ | Sector | Yield | Need to Invest | Annual Income | Pays |
|---|
How to Use the Dividend Income Calculator
Step 1: Set Your Target Income
Choose whether you think in monthly or yearly income, then enter your goal. Many people start with a target that covers one bill, such as council tax or energy, and build from there.
Step 2: Pick Your Shares and Funds
Filter by sector and switch holdings on or off. The calculator spreads your money equally across the ones you choose and shows the blended yield.
Step 3: See How Much You Need to Invest
The total shows how much you would need to invest at today’s yields to reach your income target, plus how much each holding would pay you.
How Much Do You Need to Invest for Dividend Income?
The maths is simple. Divide the income you want by the yield. At a 5% yield, every £1,000 a year of income needs £20,000 invested.
| Yearly income target | Invested at 4% yield | Invested at 6% yield |
|---|---|---|
| £1,200 (£100 a month) | £30,000 | £20,000 |
| £6,000 (£500 a month) | £150,000 | £100,000 |
| £12,000 (£1,000 a month) | £300,000 | £200,000 |
A higher yield means you need less money, but it often comes with more risk of a dividend cut. Our guides to high yield dividend stocks and dividend growth stocks explain the trade off.
Do You Pay Tax on Dividends?
Not inside a stocks and shares ISA or pension. Outside them, you get a £500 dividend allowance each year. Above that, dividend tax is 10.75% for basic rate taxpayers and 35.75% for higher rate taxpayers from April 2026. So holding your income shares in an ISA can make a big difference to what you keep.
Dividend Income Calculator FAQs
Are the Yields Up to Date?
The yields in the dividend income calculator are approximate and change every day with share prices. Always check the latest figures before you invest.
Are Dividends Guaranteed?
No. Companies can cut or cancel dividends at any time, so spread your money across different sectors rather than relying on a few shares.
What Is a Good Dividend Yield?
Many income investors aim for around 4% to 6%. Yields far above that can be a warning sign that the market expects a cut. Our guide on how to invest for income covers how to build a balanced portfolio.