If you’ve grown tired of the AI-driven rollercoaster ride that is US stocks, it might be time to consider FTSE shares for dividend income. An historical focus on income means UK-listed stocks tend to pay higher dividends than their cousins across the pond.
That makes them ideal for investors who prefer to live off their investments, rather than just watch them grow.
Let’s be honest, an extra £100 a week would certainly help alleviate any spending worries on the weekend. So how could an investor bring in that sort of income?
Working out the numbers
To target £100 a week in passive income from dividend-paying FTSE shares, we need to calculate how much would be paid annually. With 52 weeks in a year, you’d need to bring in £5,200 annually.
Here’s what that looks like at different yield levels:
| Dividend yield | Capital needed |
|---|---|
| 5% | £104,000 |
| 6% | £86,666 |
| 7% | £74,285 |
A dedicated investor contributing £300 a month and reinvesting the dividends could save up that amount in around 10-11 years. From there on it’s all gravy, assuming the average yield holds.
But never just pick the highest yielders without looking closer. Dividends can be cut at any time! For example, Harbour Energy recently adopted a new payout policy, with its total dividend for 2025 down 19% from the prior year.
PageGroup similarly reduced its full-year dividend by 50% in March, citing balance sheet protection as profits tumbled.
So how can we find reliable dividend payers?
How to target high yields
Let’s look at NewRiver REIT (LSE: NRR) as an example. Real estate investment trusts (REITs) are good for income as they’re regulated and required to pay a high portion of profits to shareholders.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
It currently offers a yield of around 8.58%, which is unusually high, but it’s well-covered by earnings and cash. The company has a 16-year long payment record and sufficient profitability, with a net margin of 24.2%.
Not that it’s risk-free. Property markets can be cyclical, occupancy rates can fall, and interest rate changes can affect borrowing costs. The dividend’s been volatile in the past decade, and the payout ratio recently sat near 96%, leaving little room for error.
Still, the balance sheet looks healthy, with around £1bn in assets and £440m debt as of the latest accounts. Yes, the share price took a hard hit during the pandemic. And it’s still down roughly 10% in the past five years. But more recently, it’s found favour in the market, climbing 6.5% in the past 12 months.
Is £100 a week realistic?
When you take the time to assess the long-term viability of FTSE dividend shares, you find that £100 a week is a realistic goal.
A reliable dividend-payer like NewRiver REIT is just one example of a stock worth considering. There’s many others, from defensive consumer names to healthcare giants.
But the key’s sustainability, not just yield. So it’s important to diversify across sectors that offer a decent balance of reliability and income. Fortunately, the UK market has no shortage of those.
What income stock do we like better than NewRiver REIT Plc right now?
One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.
And the best bit is that you can see if for yourself, right now, absolutely free of charge!
No jargon. No hard sell. Just a clear look at an income share we think is worth your time.
Mark Hartley does not hold any positions in the companies mentioned.
