Looking for the best UK dividend stocks in 2025? With inflation remaining high and the Bank of England keeping interest rates at restrictive levels, more and more investors are turning to high-yield dividend stocks for reliable income and portfolio stability. In this post, we want to reveal some of the top UK dividend stocks to buy now, stocks that not only offer attractive yields but also have strong fundamentals to sustain and potentially grow those dividends over time.
Whether you’re seeking passive income from FTSE 100 stocks, UK shares with strong dividend growth, or simply want to beat inflation, these picks could deliver long-term wealth. Read on to discover our top dividend shares for 2025 and why they could be smart buys in today’s uncertain market.
Why Should UK Investors Buy High-Dividend Stocks in 2025?
The UK economy continues to grapple with stubborn inflation, most recently reported at 3.5% in April 2025, driven by higher household bills, energy costs, and food prices. For investors seeking to protect their purchasing power and earn steady monthly or quarterly income, high-dividend UK shares are becoming an increasingly attractive alternative to cash ISAs and bonds, specially now that interest rates are being reduced, so rates in savings will also be reduced.
While capital appreciation is never guaranteed, well-selected dividend-paying companies can provide two powerful advantages: compounding income and downside protection during market volatility. And unlike speculative growth stocks, many UK dividend shares come from mature, cash-generating businesses with reliable earnings and loyal customer bases, so lets discover those UK Dividend Stocks.
Best High-Dividend UK Stocks to Buy in 2025
Legal & General Group plc (LGEN)
Dividend Yield (2025): ~8.66%
Sector: Financial Services
Legal & General remains a go-to stock for UK income investors. As one of the largest providers of pensions, insurance, and asset management services in the UK, LGEN has built a reputation for stable cash flows and shareholder returns.
In 2025, the company raised its full-year dividend by 5% to 21.36p per share, and it has been rising its dividends for over 10 years, highlighting its commitment to long-term investors. For those that are new to dividends, here there is a little guide on how dividend stocks and payment works. Legal & General appears well-positioned to maintain its high yield and currently it has price targets that are ranging from GBX 245 to GBX 295 while currently is at GBX 246,80, so there is room for growth.
Dividends from Legal and General are usually coming twice in a year and this year it will be paid on 05 Jun 2025 for those that were holding on 24 April, the next one is expected to be paid on 26 September for those holding before the 21 August.
Why buy Legal & General shares?
Investors searching for cheap high-yield FTSE 100 stocks will find Legal & General particularly attractive. Its consistent performance through market cycles, plus room for capital gains if UK financial stocks rebound, makes it a compelling choice for long-term portfolios.
British American Tobacco plc (BATS)
Dividend Yield (2025): ~7.20%
Sector: Consumer Staples
British American Tobacco continues to reward shareholders with solid dividends despite pressure from regulators and changing consumer preferences. The company’s transformation strategy focuses on “New Category” products like vapour and nicotine pouches, which are growing rapidly, we did a review on BATS stock when we choose it as one of our key stocks for the dividend stocks investment challenge.
With a dividend yield over 7% and a history of uninterrupted payouts, BATS remains a staple for those wanting defensive dividend stocks with income reliability. Analysts maintain a consensus price target of around 3,662p, while some more optimist are forecasting a 4,000p within this year, suggesting moderate upside from current levels.
Is BATS stock a buy in 2025?
For investors looking to earn passive income from UK blue-chip shares, BATS provides a rare combination of high yield, defensive earnings, and international exposure—especially attractive during uncertain economic times.
When is BATS stock paying dividends in 2025?
BATS have already declared the three following dividend. The next one is to be paid on 01 August 2025 for those holding on 26 June 2025 while the two following that are to be paid in November 2025 and February 2026.
National Grid plc (NG.)
Dividend Yield (2025): ~4.53%
Sector: Utilities
National Grid is one of the best defensive dividend stocks in the UK. It operates electricity and gas transmission networks, providing highly regulated and predictable cash flows. This stability allows it to deliver a consistent dividend, which has grown modestly over the years.
Its focus on decarbonisation and expansion of green infrastructure positions it well in a future driven by clean energy. In 2025, the company reaffirmed its commitment to a progressive dividend policy in line with earnings growth.
Stock price forecast for National Grid
With a stable business model and inflation-linked revenue, NG. is unlikely to offer explosive capital gains. However, its reliable 5% yield, recession-proof nature, and long-term contracts make it ideal for cautious income-seeking investors.
When is National Grid (NG.) paying their dividends in 2025?
They also pay two dividends a year normally and while the first one has already been paid, the second one is due on the 17 July 2025.
Phoenix Group Holdings plc (PHNX)
Dividend Yield (2025): ~8.56%
Sector: Insurance
Phoenix Group is one of the highest-yielding FTSE 100 dividend stocks, making it particularly appealing for income-focused portfolios. It manages closed life and pension funds, offering stable and predictable cash flows.
Despite its high yield, PHNX maintains strong capital ratios and consistently generates sufficient cash to cover its dividends. As of 2025, the company is on track to deliver £1.8 billion in cash generation over the next two years.
Should you buy Phoenix Group shares in 2025?
If you’re searching for high-yield UK dividend stocks with upside potential, Phoenix stands out. However, it’s better suited for patient investors willing to ride out moderate price volatility in exchange for near double-digit dividend returns.
When is Phoenix Group Holding (PHNX) paying their dividends in 2025?
The same as above, this is another dividend stock that pays its dividend twice in a year. The first of the year has just been recently paid on the 21 May 2025, but you are still on time to receive the second one which is expected to be on 30 October 2025 for those holding on 02 October 2025.
M&G plc (MNG)
Dividend Yield (2025): ~8.96%
Sector: Asset Management
M&G has built a solid reputation as a reliable dividend payer in the asset management space. After spinning off from Prudential, it has focused on optimising its business and increasing distributions to shareholders.
With a dividend cover ratio well above 2x, a yield nearly 9%, and a relatively stable asset base, M&G remains one of the best UK dividend stocks to buy in 2025 for passive income. Analysts see potential for dividend stability, supported by robust cost controls and product expansion.
When is M&G PLC (MNG) paying their dividends in 2025?
M&G is another UK Dividend stock that pays its dividend twice in a year and once again its first dividend has already been paid in May. The second one will be in October 2025 with a ex-div date in September 2025.
BT Group plc (BT.A)
Dividend Yield (2025): ~4.72%
Sector: Telecommunications
BT is undergoing a turnaround under CEO Allison Kirkby, who aims to improve profitability and restore investor confidence. The company increased its 2025 dividend by 2% to 8.16p and expects further earnings recovery next year.
Investors looking for UK telecom stocks with dividends will appreciate BT’s market dominance, cost reduction strategies, and potential for capital growth if operations improve.
When is BT Group (BT.A) paying their dividends in 2025?
The next dividend payment for BT Group will have a ex-div date on the 07 August 2025 which will pay 5.76p per share on the 10 September 2025.
How to Pick the Best Dividend Stocks in the UK
Looking for the best UK dividend stocks to buy and hold for income? Consider these tips before investing:
- Dividend Yield vs. Safety: Don’t chase the highest yield blindly—make sure the company has sustainable earnings.
- Payout Ratio: A lower payout ratio generally indicates a safer dividend. This is the percentage of their earnings that they are paying in dividends.
- Dividend Growth: Companies that consistently raise their dividends may offer better inflation protection and usually means that companies are working well.
- Financial Health: Strong balance sheets and free cash flow generation are critical for long-term sustainability.
This is obviously applying for stocks of any other countries. We did a list of top US Stocks that pay dividends monthly for a better cash flow.
Should You Invest in High-Dividend UK Stocks in 2025?
For income-focused investors, the UK stock market remains fertile ground for high-yield dividend investing. Companies like Legal & General, British American Tobacco, and Phoenix Group offer attractive yields, backed by stable business models and strong fundamentals.
In 2025, when inflation and economic uncertainty remain prevalent, building a portfolio of reliable UK dividend stocks could help preserve wealth, generate steady income, and offer protection against market volatility. Always perform due diligence and consider diversification across sectors to manage risk.
