Top UK Monthly Dividend Stocks of 2025

There are many different types of stocks that UK investors can choose from today. Income stocks — those that provide shareholders with an income through regular dividends — is one specific category. 

Dividends are never guaranteed and depend on a company’s profits and balance sheet strength. But many shares listed on the London Stock Exchange intend to make a dividend payment to their shareholders. This is the reward they offer individuals for investing in them.

Most income stocks make these payments every three, six, or 12 months. But there are a handful of UK shares that hand out dividends on a monthly basis. And those stocks can be an excellent source of income.

How do monthly dividend stocks work?

A monthly dividend stock simply chooses to pay a dividend more regularly to their shareholders. But note that the frequency with which they make dividend payments doesn’t translate into higher returns. This is a mistake that some new investors can make.

Let’s consider the case of Company A. This income stock can choose to pay a £1 dividend to its shareholders twice a year, or it can choose to reward investors semi-annually and to dish out two £6 payments. 

Either way, the company will make a total dividend payment of £12. The return is exactly the same. The only thing an income investor needs to consider is how often they wish to receive their cash.

Investors can use a company’s online resources to learn how often they pay dividends. This information can be found in the dividend history section of a firm’s corporate website, for example, or in a company’s annual report.

What UK companies pay monthly dividends?

Investors only have a small selection of monthly dividend stocks to choose from in the UK. There are around 1,775 companies currently listed on the London stock market. Yet only 42 of these pay dividends out each month.

The lion’s share of UK stocks that pay monthly dividends are real estate companies, investment trusts, and exchange-traded funds (ETFs).

Property businesses usually receive their rents every four weeks or so, and therefore have the capacity to distribute dividends at the same frequency. This is the same for an investment trust that is focussed on the real estate market. These are known as real estate investment trusts (REITs).

Top UK monthly dividend stocks

Let’s look at some monthly dividend stocks that UK investors can buy today.

TwentyFour Select Monthly Income Fund 

The TwentyFour Select Monthly Income Fund is a closed-ended investment fund. This sort of mutual fund issues a set number of shares at the time of its initial public offering (IPO). They are also actively managed, unlike open-ended mutual funds.

A major difference between closed and open-ended is the use of leverage. Funds like TwentyFour Select Monthly Income can use leverage to purchase assets. On one hand, this can boost long-term returns. But investors need to be aware that taking on debt also increases the risk they face.

This particular fund is focused on acquiring fixed income credit securities in the UK and Europe. Its portfolio comprises a mix of corporate bonds, asset-backed securities, high-yield bonds, bank capital, Additional Tier 1 securities, leveraged loans, and payment-in-kind notes.

Financial instruments with a higher chance of default offer better interest rates. However, such investments also raise the potential for the fund to endure big losses.

JPMorgan USD Emerging Markets Sovereign Bond UCITS

As its name implies, the JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF is an ETF. These financial instruments are bought and sold on stock exchanges and are baskets made up of certain securities. Such funds can hold assets like shares, bonds, commodities, and currencies.

A major advantage for investors is that these funds spread risk by holding a variety of different securities. However, their complexity means that they can be hard to understand for new investors.

This ETF from JP Morgan operates a portfolio of government and quasi-government bonds across developing markets. At the last count in October 2024, its portfolio held 366 different holdings.

The JPMorgan USD Emerging Markets Sovereign Bond UCITShas a truly global focus. Turkey, Brazil, South Africa, and Indonesia are all among its top 10 holdings. 

Investment vehicles like this offer individuals the chance to capitalise on fast-growing markets. However, the political and economic landscape in emerging nations can also be volatile. Government bonds are less risky than corporate bonds, but they can still expose investors to higher risk than bonds from developed countries.

Are monthly dividend stocks safe?

UK shares that pay monthly dividends aren’t necessarily more or less safe that those that distribute cash on a quarterly or six-month basis.

Investors still need to carry out the same checks as they would on any other dividend-paying stock. For example, ensure that predicted dividends are well covered by anticipated earnings (dividend coverage of two times and above provides a wide margin of safety). Selecting stocks with strong balance sheets and robust cash flows is also important. 

Which UK stocks pay monthly dividends?

Typically, businesses will only pay dividends to shareholders annually, semi-annually, or quarterly. This decision is entirely at the discretion of the management team, as is their ability to cancel dividends if needed.

However, what if investors want to receive dividends every month, similar to how fixed-income investors can receive coupons? In this scenario, investors can turn to mutual funds and exchange-traded funds.

There are several funds listed on the London Stock Exchange which are structured to pay shareholders dividends on a monthly schedule funded by their own investment portfolios.

As of April 2025, this list includes:

Are monthly dividend stocks a good investment?

The obvious advantage of selecting monthly dividend stocks is that an income investor doesn’t have to wait to receive their payout.

This can be especially important for those who depend on dividend income for everyday living. For example, it can make budgeting easier as an individual can expect a cheque every four weeks or so.

Prioritising monthly dividend stocks can also be useful for individuals looking to reinvest their money. Frequent dividends mean they are more likely to have cash on hand to seize on an investment opportunity. 

What’s more, the sooner an investor receives their dividend, the more quickly they can reinvest it and get their money working for them. In other words, a monthly dividend will boost someone’s long-term wealth thanks to the beauty of compounding.

One final advantage of monthly dividend stocks is that investors don’t have to hold onto a share for too long just to receive their payout. This has an obvious advantage if, for example, an individual needs to raise capital or if they suspect a bear market could be on its way. They can be a great investment if your priorities align with the benefits above. Be sure to evaluate your personal investing goals before you make your decision.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.