The FTSE 100 and FTSE 250 both surged in 2025, driving dividend yields on income-paying stocks sharply lower. But don’t be disheartened. The London stock market remains a great place to go shopping to target a passive income.
Take the following large- and mid-cap shares: Octopus Renewables Infrastructure Trust (LSE:ORIT), Henderson Far East Income (LSE:HFEL) and Regional REIT (LSE:RGL). The dividend yields on these shares are enormous, coming in at 10% (or just above) for 2026.
I think investors should consider these UK shares for a large and growing dividend income. Want to know why?
A top REIT
As a real estate investment trust (REIT), Regional REIT must pay at least 90% of property rental profits out in dividends each year. This is in exchange for juicy tax breaks like protections from corporation tax.
This rule doesn’t guarantee a substantial and increasing passive income on its own. But it provides greater dividend visibility than most other dividend shares provide.
Regional REIT can sometimes experience occupancy issues that impact earnings. Rent collection issues can also naturally spring up during downturns. However, the investment trust’s large portfolio helps to reduce such threats to shareholder returns.
The company had a total of 740 tenants spread across 123 properties at the midpoint of last year. For 2026, the dividend yield here is a gigantic 10.3%.
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Look East
Henderson Far East Income is an investment trust that holds shares in 68 different Asian companies. For this year, it offers an even-higher 10.6% dividend yield.
Investing in emerging markets can be a wild ride at times. Economic and political conditions can change rapidly, impacting corporate earnings (and by extension, shareholder returns) for better and worse.
But Henderson Far East been able to navigate such volatility and still deliver excellent dividends. This is thanks in part to its diversified portfolio that spans different countries and sectors. It also reflects the excellent stock-picking pedigree of its management team.
Annual dividends here have risen every year for around two decades. I’m expecting them to keep growing as Asia’s developing economies rapidly expand.
10.7% dividend yield
Octopus Renewables Infrastructure is one of the top 10 highest-yielding investment trusts in the UK. This is thanks to its strong cash flows that support large dividends year after year.
As a renewable energy producer, the company benefits from steady demand across the economic cycle. This alone doesn’t guarantee stable cash flows and profits. Clean electricity sources are famously sensitive to weather conditions — when the wind doesn’t blow, for instance, power generation can fall off a cliff, impacting earnings.
But Octopus’s diversified portfolio helps reduce this threat. It produces power from onshore and offshore wind farms and solar assets. It also owns battery storage plants. And what’s more, its projects can be found across the UK, Ireland and Mainland Europe, reducing exposure to any single weather pattern.
I think this could be a great long-term income stock to consider as the green energy transition accelerates.
