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2 FTSE 100 dividend stocks I’d buy today to beat the State Pension

The current rate of State Pension amounts to less than £9,000 a year, which many retirees may struggle to live on in retirement. The State Pension age is also set to rise over the next few decades.

Therefore, it could be time to start building your own retirement nest egg, so you don’t have to rely on the state payout.

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With that in mind, here are two FTSE 100 dividend stocks that have promising long-term outlooks, and could be perfect additions to a retirement portfolio.

Associated British Foods

The Associated British Foods (LSE: ABF) Primark business is one of the great success stories of British retail. The retailer continues to defy expectations and the wider high street malaise that has impacted many of its peers over the past few years.

Recent trading updates from the group show that Primark continues to dominate the retail space and management is capitalising on consumers’ booming demand for its products by opening new stores around the country.

Primark differs from most of its competitors because the company does not offer an online service. It also tends to own stores rather than leasing from landlords. This has enabled the business to operate at a lower cost, and customers are still more than happy to rush to its stores and take advantage of the low prices offered.

With the stock currently trading on a price-to-earnings (P/E) ratio of just 17.5, ABF appears expensive. However, the company’s past performance seems to justify its high multiple. A dividend yield of 1.9% is also offered with the payout being covered nearly three times by earnings per share.

It seems to have a sound strategy for growth over the long run. As such, this stock could be an excellent investment for your retirement portfolio.


Recent trading updates from wealth and asset manager Schroders (LSE: SDRC), show that the business is currently experiencing challenging operating conditions.

Passive investment funds are grabbing market share from active managers like Schroders, and these companies are having to come up with new ways to create wealth for their customers, which is increasing costs.

However, as Schroders is still majority-owned by its founding family, the company can afford to take a long-term view when it comes to planning for the future. Management has instigated several initiatives recently, including expanding overseas and a partnership with Lloyds Bank the part of its plan to return the group to growth.

With these initiatives under way, now could be the right time to buy a slice of this business. The stock is currently trading on a P/E ratio of just 11.8 and a dividend yield of 4.5% is on offer. Although earnings may not rise substantially in the near term, the company appears to have a sound strategy in place that could improve profitability in the coming years.

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Rupert Hargreaves owns shares in Schroders (Non-Voting). The Motley Fool UK has recommended Associated British Foods and Schroders (Non-Voting). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.