High yield dividend stocks are one of the easiest ways to turn your savings into a regular income. On average, the FTSE 100 as a whole yields around 3%, but several big names pay well over 6%. In this guide I look at the top high yield dividend stocks in the UK for 2026, the risks behind those yields and how to pick the ones worth owning.
Yields correct as of 14 October 2026. They are based on dividends paid over the last 12 months and the share price on that date. However, yields move every day, so always check before you buy. This is not financial advice.
The Highest Yield Dividend Stocks in the FTSE 100 Right Now
| Company | Sector | Dividend yield |
|---|---|---|
| Ithaca Energy | Oil and gas | 9.05% |
| Legal & General | Insurance and asset management | 7.50% |
| LondonMetric Property | Property (REIT) | 7.05% |
| M&G | Asset management | 6.68% |
| Land Securities | Property (REIT) | 6.48% |
| Investec | Banking | 6.47% |
| Imperial Brands | Tobacco | 5.89% |
| Aviva | Insurance | 5.78% |
| British American Tobacco | Tobacco | 5.75% |
| NatWest Group | Banking | 5.23% |
Notice the pattern. In particular, insurers, property trusts, tobacco and energy dominate the list. Generally, these are mature businesses that generate lots of cash but have fewer ways to grow, so they hand more of it back to shareholders.
Top High Yield Dividend Stocks in the UK for 2026
Legal & General: 7.5%
Legal & General is one of the UK’s biggest pension and insurance groups. In fact, a large part of its business is taking on company pension schemes, which brings in steady, long term cash. Notably, it has been one of the most reliable high yield dividend stocks on the FTSE 100 for years.
LondonMetric Property: 7.05%
LondonMetric is a real estate investment trust that owns warehouses, logistics sites and other long lease properties. Because it is a REIT, it must pay out most of its rental profits as dividends. As a result, it is a popular pick for income investors. Our dividend income calculator shows how much you would need to invest for a target income.
M&G: 6.68%
M&G manages savings and pensions for millions of customers. So far, its yield has stayed high for several years. However, its profits depend on markets and on keeping customer money in its funds, so it is not risk free.
Aviva: 5.78%
Aviva is one of the UK’s biggest insurers, and it grew even larger in car and home insurance after buying Direct Line in 2025. Since then, a simpler business and a steady payout have made it a favourite with dividend investors. Admittedly, the yield is lower than some rivals, but the business is broader.
British American Tobacco: 5.75%
BAT is the biggest company on this list by far. Cigarettes are in long term decline, but they still produce huge amounts of cash, and the group is growing its vapes and nicotine pouches. On the other hand, some investors avoid tobacco on ethical grounds, which is worth considering.
Ithaca Energy: 9.05%
Finally, Ithaca has the highest yield on the FTSE 100. It produces oil and gas in the North Sea. This means its profits, and its dividends, rise and fall with energy prices and UK windfall taxes. So treat a yield this high with extra caution.
Why High Yield Dividend Stocks Can Be a Warning Sign
A yield is just the dividend divided by the share price. So when a share price falls sharply, the yield shoots up. In some cases, that is a bargain. At other times, the market expects a dividend cut, and the yield is a trap.
So before you buy any high yield dividend stocks, run through these three checks.
Step 1: Check the Dividend Cover
Dividend cover shows how many times profits cover the payout. In general, a figure above 1.5 is comfortable, while anything below 1 means the company is paying out more than it earns.
Step 2: Look at the Dividend History
A company that has held or grown its dividend through tough years is more likely to keep paying. For example, our guide to dividend growth companies covers firms with a long record of raising payouts.
Step 3: Check the Debt
Heavy borrowing and rising interest costs often come before a dividend cut. So if debt is climbing while the payout stays high, be careful.
Before buying any high yielder, it’s worth reading my guide to dividend traps, which shows how Mondi and WPP caught out income investors.
How High Yield Dividend Stocks Are Taxed in the UK
Outside an ISA or pension, you get a £500 dividend allowance each year. Above that, dividend tax rates rose by two percentage points in April 2026, to 10.75% for basic rate taxpayers and 35.75% for higher rate taxpayers. Meanwhile, the additional rate stays at 39.35%. You can check the current rates on the GOV.UK tax on dividends page.
However, holding your shares inside a stocks and shares ISA avoids all of that. That way, every dividend is tax free and you never have to declare it. Our guide on Bed and ISA shows how to move existing shares into one.
A high yield today is not the only route to income. Our guide to dividend growth investing in the UK shows how a smaller yield that rises every year can catch up over time.
High Yield Dividend Stocks: Common Questions
Not always. A very high yield can mean the share price has fallen because investors expect problems, and the dividend may be cut.
Outside an ISA or pension, you get a £500 dividend allowance. Above that, rates for 2026/27 are 10.75% for basic rate, 35.75% for higher rate and 39.35% for additional rate taxpayers.
Holding dividend shares inside a Stocks and Shares ISA or a pension shields them from dividend tax.
You might also find this useful: Economic Moat.
Should You Buy High Yield Dividend Stocks?
For income, high yield dividend stocks can be a great tool, especially inside an ISA. Above all, the key is to spread your money across different sectors, so a cut from one company does not hit your whole income.
To put that in numbers, £20,000 spread across shares yielding an average of 6% would pay around £1,200 a year. Better still, reinvest that income and it buys more shares, so next year’s dividends are bigger even if no company raises its payout.
If picking individual shares feels like too much, an income fund or a FTSE 100 tracker gives you a slice of all of them in one go. Either way, reinvesting your dividends in the early years lets compounding do the heavy lifting. Also, our guide on how to invest for income explains how to build a full portfolio around them.
Content on IceburgWealth.com is for general information only and is not financial advice. I am not a regulated financial adviser, and tax rules and figures can change. Always do your own research and consider speaking to a qualified adviser before making any financial decision.
This article is part of our UK Investing Guide, where you will find every related article in one place.
What Would You Do?
I'd love to hear your take on this. Have you been in this situation yourself, or would you do things differently? Let me know in the comments below. Your experience could help someone else make their decision.
Disclaimer: This article is for general information only and is not financial advice. I'm not a regulated financial adviser. Rules, rates and allowances can change, so check the latest details and speak to a qualified professional before making any decisions.
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