Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Best Dividend Stocks for UK Investors in April 2025 (My Top 5 Picks!)
Ruby Layram
7th Apr 2025
Investing in the best dividend stocks is a popular way to build a portfolio that generates passive returns. These stocks pay out small shares of revenue to investors, providing an additional way to make money on top of capital gains.
In the UK, there are hundreds of dividend-paying stocks to choose from. However, not all of these stocks will generate the returns that you might hope for.
Whilst some dividend stocks can be a great addition to your portfolio, others come with significant risk or simply aren’t worth buying.
Creating a strong dividend portfolio is all about spotting those hidden gems that provide a high dividend yield with a relatively low risk.
So, what dividend stocks are worth buying in 2025?
The exact answer to this question will vary depending on your investing strategy and goals. For example, some investors might have a higher risk appetite than others which means that they might be able to invest in risky yet high-paying dividend shares.
On the other hand, investors who want to take less risk might be better suited to more stable dividend stocks that offer a slightly lower (but still generous) yield.
It’s all about knowing your strategy!
Nevertheless, finding the top dividend stocks in the current market is an interest shared by most investors. Therefore, I thought I would share my own top picks! Here are 5 UK dividend stocks that I am watching in January 2025.
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A Bit of Helpful Info…
Before we jump into my top dividend picks, I thought it would be helpful to explain what a ‘dividend yield’ is – it will be mentioned quite a lot in this guide!
Dividend yield: This is the number that tells you how much a company will pay in dividends each year. The number is a ratio that represents the percentage of a company’s share price that is paid as a dividend. Yields between 2% and 5% are considered strong and anything above 5% is considered high.
The Best Industries for Income Stocks in April 2025
If you’re looking for the best industry to invest in for dividend stocks in January 2025, banking and insurance might just be your best option! With HSBC, Legal & General, and M&G delivering eye-popping yields over 9%, these sectors are shining bright for income-seeking investors.
One of the easiest ways to gain exposure to these stocks is to invest in an ETF that tracks UK banking and insurance stocks. The FTSE 100 Index is a good option – to fund tracks the largest UK companies (by market capitalization) including HSBC and Legal & General.
My Top 5 Dividend Stocks for April 2025
I recently did a bit of a spring clean of my investment portfolio and came across some appealing dividend opportunities. Here are 5 dividend stocks that I am watching right now.
1. Aviva Plc.
Dividend yield (as of April 2025): 7.01%
Aviva’s looking even stronger than it did earlier this year. In its full-year 2024 results, the company reported operating profit of £1.4 billion, up 9% year-on-year. That’s great news for income investors, as it supports the group’s plan to increase dividends by mid-single digits each year.
Aviva’s also benefiting from robust capital generation, with a Solvency II cover ratio of 205%, giving it a strong buffer and flexibility to maintain (and even grow) its dividend.
2. Legal & General
Dividend yield (as of April 2025): 8.35%
Despite market jitters earlier this year, Legal & General continues to show its resilience. In March, it announced a final dividend of 13.71p, bringing its full-year payout to 20.68p per share—a 5% increase.
The company is pushing ahead with a £200 million share buyback programme, and its long-term focus on bulk annuities and asset management positions it well for growth—even if rates come down later in the year.
It’s not the flashiest stock, but it’s a dividend machine. If you’re after income with consistency, LGEN is one to keep holding (or buying!).
3. Pheonix Group
Dividend yield (as of April 2025): 10.18%
Phoenix is still the highest-yielding blue-chip stock on the FTSE 100, but it’s not just about the headline number. The company remains committed to sustainable and progressive dividends, supported by a robust capital base and steady cash flows.
In its 2024 results, Phoenix delivered £1.7 billion in cash generation, beating its target. It also reaffirmed its commitment to grow the dividend by at least 2.5% annually.
Sure, it comes with a bit more risk than the others, but Phoenix’s balance sheet strength helps back up that double-digit yield.
4. M&G
Dividend yield (as of April 2025): 9.12%
M&G has remained a reliable income play, even as its share price has bounced around in Q1. Its final dividend of 13.6p per share, paid in March, kept its full-year payout at 19.6p—unchanged from 2023 but still generous.
The company’s recent cost-cutting strategy and strong inflows into its PruFund range suggest better earnings visibility going forward. That makes this high yielder a relatively stable pick for income-seeking investors.
5. BP Plc.
Dividend yield (as of April 2025): 5.95%
BP continues to offer a balanced mix of yield, growth, and energy transition strategy. With $37 billion in adjusted EBITDA in 2024 and plans to return $14 billion to shareholders via buybacks and dividends, the oil giant still has deep pockets.
It’s streamlining operations, selling off lower-margin assets, and doubling down on renewables. BP’s partnership with JERA Co., Inc. on offshore wind projects underscores its intent to remain competitive in the green energy space.
While oil prices have been volatile in 2025, BP’s strong cash flow and stable payout policy mean it still deserves a place in an income-focused portfolio.
How To Invest in Dividend Stocks Safely
Dividend stocks can seem like an exciting investment opportunity for investors who want to generate passive income. However, it is important to be aware that investing in dividend shares (just like any shares) comes with risk! Here are some top tips for reducing the risks that are involved with buying dividend stocks.
Don’t be fooled by high yields!
It can be tempting to fill your portfolio with high-yield dividends that promise excellent returns. However, high yields often come with high risk!
In some cases, it is not sustainable for a company to pay high dividend yields. If the company suddenly falls into financial trouble, it may have to reduce the yield or cut it completely.
It is sometimes better to focus on companies that offer an average yield and more stability.
Diversify
If you’ve been a Magpie reader for some time, you will have definitely heard us preaching the importance of diversification before.
Diversifying your portfolio is one of the best ways to reduce risk. It involves spreading your investments across different assets, instead of putting all of your money into one company.
Consider investing in a basket of different stocks in different industries.
There are a number of good dividend stock opportunities for UK investors in 2025. In this post, I have shared my top 5 picks that seem to be pretty sustainable right now. However, it is important to understand that market conditions can change and companies may not always be able to pay the dividends that they advertise. For this reason, you should do your own research into the company before making any decisions.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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