Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Best Dividend Stocks for UK Investors in October 2025 (My Top 5 Picks!)
Ruby Layram
29th Oct 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.
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 October 2025
If you’re looking for the best industry to invest in for dividend stocks in October 2025, financials, insurance, energy, and consumer staples remain attractive. These sectors often deliver higher yields and stable cash flows.
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 October 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. Bellway plc (BWY)
Dividend Yield: ~ 70 p per share following a dividend increase of ~29.6%.
Sector: Home-building / construction
Why I like it: The company raised its ordinary dividend and launched a share buy-back programme, showing strong shareholder commitment. While the housing market faces headwinds, Bellway is still delivering value for income investors.
2. MONY Group plc (MONY)
Dividend Yield: ~ 6.3% (according to recent screening)
Sector: Financial services / insurance
Why I like it: The financial services sector is a sector that tends to weather even the worst of storms! So, it makes a good option for long-term investors who want longevity over short-term trends.
3. IG Group Holdings plc (IGG)
Dividend Yield: ~ 4.2% (recent estimate)
Sector: Fin-tech / online trading
Why I like it: Although the yield is lower than some high-yield names, IG has strong fundamentals and a sustainable payout ratio – so a more conservative choice for dividend investors.
4.Pets at Home Group plc (PETS)
Dividend Yield: ~ 5.9% (recent yield)
Sector: Retail / consumer discretionary (pets category)
Why I like it: A more niche, thematic choice in the UK dividend space, benefiting from steady demand in pet care and a decent income yield. It’s a great way to invest in what you know!
5. Tristel plc (TSTL)
Dividend Yield: ~ 3.8%
Sector: Infection prevention / life-sciences
Why I like it: While yield is modest, the company shows sustainable dividend coverage and potential growth- good for investors who value income!
After the trauma of Covid-19 (sorry to mention it!)- infection prevention is in the spotlight and there is a lot of investment in the space!
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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