I’m searching for UK shares being bought heavily by long-term income investors. And five names keep cropping up, all with attractive dividend yields.
Here they are, showing how their share prices have moved over the past five years…
| Company | Forecast yield | Forecast P/E | 5-year performance | Recent share price |
| British American Tobacco | 5.7% | 12.3 | +52% | 4,250p |
| Phoenix Group Holdings | 8.0% | -37.9 | -5.1% | 690p |
| National Grid (LSE: NG.) | 4.1% | 15.4 | 22% | 1,160p |
| BP | 5.2% | 15.7 | +99% | 470p |
| Legal & General | 8.7% | 14.3 | +5.9% | 245p |
The Phoenix Group price-to-earnings (P/E) ratio looks a bid odd. But insurance companies can be like that sometimes — forecasts put the 2026 P/E at 15.6.
These are familiar UK shares to long-term Fool followers. I don’t have space to examine all five here, so I’m focusing on one — National Grid.
Investor shock
For years, investors saw National Grid as a bastion of stability. It offered a clear vision of future income, predictable cash flow, long-term progressive dividends, and no surprises.
They’re mostly still there, except for that last one. In May 2024, the company shocked the market with a new £7bn rights issue. UK and US energy network infrastructure needed a big rise in capital investment, up to around £60bn.
The share price tanked. And — horror of horrors — the per-share dividend fell in 2025. That happens when you spread the annual dividend cash across more shares. But it shattered assumptions, and shook confidence in the ever-upwards trend.
Back in favour
But the underlying business was still the same, with the same positive outlook. And it looks like the market has forgiven National Grid for the unpleasant disturbance. It’s become a passive income favourite again, and broker forecasts bear out the attraction.
Analysts predict a 50% rise in earnings per share between 2025 and 2028. That would support a dividend yield forecast at 4.3% by 2028. And that’s with cover by earnings rising strongly — from 1.3 times in 2024 to 1.8 times in 2028.
At first-half results time on 6 November, the company spoke of its intention to “grow the dividend per share in line with UK CPIH“. That’s consumer price inflation, including housing costs.
With earnings looking likely to outstrip the resulting dividend rises, it suggests one thing to me. It must surely reduce the chance of National Grid needing another share issue any time soon.
UK income shares
The more I look at the five-share selection above, the more I think UK investors are getting it right.
I’d want diversification, so I’d only consider one of the insurers — and keep the cyclical risk down. BP is open to oil price weakness, however, and tobacco faces long-term trends away from smoking.
National Grid itself faces regulatory scrutiny. And I’m not thrilled seeing net debt forecast to reach £60bn by 2028. But four out of those five, plus maybe a housebuilder like Taylor Wimpey?
High mortgage rates don’t help builders. But I think it’s a tempting selection of UK shares to consider for a passive income starter portfolio.
