After seven years of ultra-low interest rates, investors and savers alike have seen numerous alternative methods of obtaining an acceptable yield on their savings income. Traditional, safer, savings accounts are covered up to £75k for individual accounts and £150k for joint accounts per institution. But savers seeking an acceptable return on their nest eggs have been forced to look elsewhere – even where there’s more risk.

Appealing to the ‘grey’ pound

One thing’s clear from the demographics at play in the UK and in certain other parts of the developed world, the population as a whole is living longer. I could write about the many moving parts that are at work behind the scenes. However, I’m focusing on how companies are looking to serve the opening in the market that I expect to grow significantly over the next few years as baby boomers reach retirement age and start to look for income to replace that lost from employment.

And when I received my copy of Investment Times from asset manager Hargreaves Lansdown (LSE: HL) I noticed a new Multi-Manager High Income Fund launch that appears to be positioned to tackle the lack of income on offer from banks.

The new fund will be led by Lee Guardhouse and Ellen Powley who will seek to deliver a sustainable high income, distributed on a monthly basis. Though the yield at the launch price of £1 is expected to be around an above-average 4.5%, as with all riskier investments, this is variable and not guaranteed.

In order to smooth any volatility, the fund will invest in the managers’ favourite funds that are themselves investing in both shares and corporate bonds. Initially the managers are eying a 60/40 split in favour of funds investing in shares, though obviously this could change over time in order to achieve the best result for clients as the economy ebbs and flows.

Is there a better way?

I have to say that if I were a novice investor with a lump sum to invest for regular income, I would be tempted by the Hargreaves offering. However, as with all funds, investors need to keep a watchful eye on charges, both in terms of the underlying investments of the funds within the fund, and the fund itself.

Accordingly, as a slightly more experienced investor, I tend to lean towards shares of individual companies that in my view offer income, with growth in earnings that should translate into an increased dividend as time goes by.

To that end, I’ve selected three shares which look to fit the bill:

  • GlaxoSmithKline (LSE: GSK) the global healthcare company that researches and develops pharmaceuticals, vaccines and consumer healthcare products – forward yield of 5.89%
  • Unilever (LSE: UNLR) the global consumer defensive giant engaged in the supply of food, home and personal care products – forward yield of 2.96%
  • Imperial Brands (LSE: IMB) formerly Imperial Tobacco, a global fast-moving consumer goods company focused on a tobacco portfolio that offers a range of cigarettes, fine cut and smokeless tobaccos, plus papers and cigars – forward yield of 4.29%

Taken together, these three stocks yield an above average 4.38% that I expect to grow over time, and importantly, as depicted by the chart, they’ve also outperformed the FTSE 100 over the last 12 months.

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Dave Sullivan owns shares in Imperial Brands. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended GlaxoSmithKline and Hargreaves Lansdown. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.