By whatever name the FTSE 100’s Phoenix Group Holdings is known, it will likely long remain a cornerstone of my dividend income portfolio.
For years, Phoenix delivered one of the highest average annual dividend yields of any FTSE firm. From 2020 to 2024 inclusive, these were: 6.8%, 7.5%, 8.3%, 9.8%, and 10.6%.
And under its new incarnation of Standard Life (LSE: SDLF) it increased the payout in 2025 to 55.4p. This gives an 8.4% dividend yield on its £6.57 share price — towering above the present FTSE 100 average of just 3.1%.
So how much can I make from my £20,000 holding going forward?
Even higher dividend yields forecast
A firm’s dividend payouts are ultimately driven by consistent earnings growth over the long run. A risk to Standard Life is any further surge in the cost of living, which may cause customers to cancel policies. Another is the high level of competition in the sector. And although it remains the UK’s largest long-term savings and retirement company, its margins could be squeezed.
That said, consensus analysts’ forecasts are that its earnings will rise by a whopping average of 60% a year over the medium term. As a corollary of this, analysts project that Standard Life will raise its dividends to 56.8p this year, 58.8p next year, and 60.4p in 2028. These would generate respective annual dividend yields of 8.6%, 8.9%, and 9.2%!
This all looks well supported in the firm’s 2025 results, released on 16 March. These saw adjusted operating profits jump 15% to £945m and total cash generation at £1.7bn. Both were ahead of analysts’ respective expectations of £937m and £1.66bn.
Management added it’s on track to meet its 2026 financial targets, including an adjusted operating profit of around £1.1bn. It also said it remains on course to deliver another £500m of excess cash this year.
How much dividend income can I make?
My £20,000 holding in Standard Life could make me £30,010 in dividend income after 10 years and £292,688 after 30 years.
The timeframe is commonly seen as a standard investment cycle for long-term investors. It encompasses the idea of first investments around 20 and early retirement options around 50.
These figures also assume that the dividends are reinvested back into the stock to harness the power of dividend compounding. The forecast 9.2% dividend yield is used as a base average. However, these payouts can go down as well as up over time.
By the end of the 30 years, my holding in Standard Life would be worth £312,688 (including my original £20,000 stake). And this would pay me a dividend income of £28,767 by that time!
My investment view
Standard Life continues where Phoenix Group left off — prioritising shareholder returns through huge dividend payouts. These flow from a business generating enormous cash from exceptional earnings growth.
I will be adding to my holding in the firm, as I want the most comfortable retirement I can get. I’m also looking at other very high-yielding stocks with excellent earnings growth momentum.
