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Investing in a Self-Invested Private Pension (or SIPP) is ideal for an investor with a long-term strategy to investing, like me.
Alongside the best way, as dividends pile up they are often saved inside the SIPP and used to fund the acquisition of extra shares without having so as to add further capital. That straightforward however highly effective investing strategy is named compounding.
A SIPP investor might have the very best of each worlds, including in new funds concurrently compounding dividends from present holdings to purchase extra shares.
Listed below are 5 UK dividend shares for income-focussed SIPP buyers to contemplate. Every yields a minimum of 5.2%.
ITV
Broadcaster ITV (LSE: ITV) has a coverage of paying a minimum of 5p per share as a dividend yearly. In its outcomes this month, it delivered as soon as extra on that and in addition talked about that it expects to develop the dividend over the medium time period.
Provided that the ITV share worth is in pennies, that implies that the FTSE 250 broadcaster now yields 6.5%.
Nonetheless, the share worth has disenchanted and is now 9% decrease than it was 5 years in the past.
I feel that displays ongoing investor concern in regards to the enterprise prospects. Conventional broadcasting stays important however is in decline. ITV has expanded its digital providing significantly, however that prices cash and the market is way more fragmented, making it more durable to construct economies of scale.
However I feel its mental property, viewer base, and studio rental enterprise are all aggressive benefits.
Aviva
Insurance coverage could also be boring however it may be profitable. Insurer Aviva slashed its dividend per share in 2020 but it surely has since been elevating it handily.
Final 12 months noticed a 7% improve within the dividend per share and Aviva now yields 6.6%. Its sturdy manufacturers mixed with an enormous buyer base (over 17m within the UK alone) are actual strengths for my part.
A proposed mixture with Direct Line might speed up development and add economies of scale. However it additionally dangers distracting administration from the core enterprise.
WPP
One other agency that has reduce its dividend over the previous few years is promoting community WPP. However its yield nonetheless stands at a juicy 6.2%.
Can it final?
The Metropolis appears nervous in regards to the dangers AI poses to plenty of the advert creation and advert area shopping for work WPP presently does. The share has already fallen 24% in 2025.
However I reckon its confirmed enterprise mannequin, shopper relationships, and enormous company community are strengths. AI might assist cut back prices so could also be a possibility, not only a risk.
J Sainsbury
Retailer J Sainsbury wants little introduction. Its 5.2% yield makes it a share I feel revenue buyers ought to contemplate.
Each within the grocery store enterprise and thru its Argos operation, the FTSE 100 firm has accomplished a superb job of integrating digital and offline purchasing.
However a weak financial system might put additional strain on revenue margins, as rivals reduce costs to draw consumers.
BP
5.8%-yielding BP has been doing what appears to be like like a U-turn, ditching a lot of its renewable power focus to place extra emphasis on oil and fuel.
I see that nearly as good for profitability. However it does improve the danger to each gross sales and earnings if the oil worth crashes, because it tends to do on occasion.
