Passive income is money that keeps landing in your account with barely any ongoing effort. And that is exactly what reliable dividend payers such as insurance giant Admiral (LSE: ADM) offer.
It has a long record of strong earnings, disciplined underwriting, and the kind of dependable cash generation that supports generous, recurring dividends.
So, how much passive income from dividends are we talking about?
Rising payouts forecast?
Admiral’s present dividend yield is 5.2% — well above the FTSE 100’s current average of 3.1%. These returns can go up or down over time, as share prices and annual dividends alter. But analysts project the insurer’s will rise to 5.8% next year and to 6.4% in 2028.
Based on the forecast 6.4% as an average, my £20,000 holding in the firm could earn me £17,865 in dividends after 10 years. The number also assumes the payouts are reinvested in the stock to capture the full supercharging effect of dividend compounding. It is a similar concept to allowing interest to quietly accrue in a bank savings account. But the effect on dividend income over the years can be stunning.
After 30 years on the same basis, this would rise to £115,725. At that point, the holding’s total value (including the £20,000 stake) would total £135,725.
And this would deliver a yearly income of £8,686!
Does the core business support such numbers?
Dividends ultimately rise or fall with the strength of the business itself. This raises the key question of whether Admiral’s earnings engine can keep powering those numbers.
A risk is competitive pressure in UK motor pricing that could limit the firm’s ability to pass on higher costs. This could put downward pressure on earnings momentum. Another is a sharp fall in used‑car prices due to the continued rise in the cost of living. That would mean Admiral gets less money back when it sells the remains of written‑off cars.
Nevertheless, its full-year 2025 results released on 5 March 2026 saw record profits. Group profit before tax rose 16% year on year to £957.9m, highlighting underwriting discipline and improving claims trends.
Earnings per share also increased 16% to 247.4p, underlining the scalability of its capital‑light model. Meanwhile, insurance revenue climbed 9% to £4.98bn, illustrating firm pricing and steady customer growth in UK Motor and Household.
Together, these drivers point to a business with broad‑based momentum and the operational muscle to grow its dividends over time.
My investment view
Admiral keeps proving its ability to turn disciplined underwriting into rising profits and dependable cash returns, in my view.
The latest results show a company with real earnings momentum, capital strength, and a dividend policy that rewards patient shareholders.
I like that Admiral does not need heroic growth assumptions to deliver attractive long‑term income. It simply needs to keep doing what it already does well.
With forecasts pointing to rising payouts and steady, repeatable profitability, the shares look worthy of attention from income‑focused investors.
For me, it remains a high‑quality FTSE 100 name that can anchor a passive‑income portfolio for years to come. Consequently, I will buy more of the stock very soon.
And I have my eye on ultra-high-yielding shares in other sectors too.
Should you invest £5,000 in Admiral Group Plc right now?
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Simon Watkins owns shares in Admiral.
