A Stocks and Shares ISA is a wonderful way to build long-term wealth. All capital gains and dividends are free from tax, allowing your money to compound year after year without HMRC taking a slice.
That makes them particularly attractive for income investors. There are plenty of top dividend stocks on the FTSE 100, but the following three can’t be beaten on yields. They’re in different sectors, so might complement each other nicely.
Legal & General Group
Life insurer and asset manager Legal & General Group (LSE: LGEN) is finally showing some life. Its shares are up 16% over the last year, although they’re just 8.7% higher over five years. The trailing dividend yield is an impressive 7.47%.
I hold L&G myself, so I’m pleased to see the recent recovery. Latest results were encouraging. Core operating earnings per share jumped 11% in the first half of 2026, while the group has started a £1.2bn share buyback. It also raised its interim dividend by 2%.
There are risks. Legal & General’s profits can be affected by investment markets, while its huge asset management operation is exposed to a potential stock market sell-off. The shares have also struggled for years, so there’s no guarantee this revival will last. But that income looks sustainable and is hard to ignore.
LondonMetric Property
LondonMetric Property (LSE: LMP) is a real estate investment trust, or REIT, focused on properties such as logistics, convenience and healthcare assets. Its shares have also disappointed. They’re down 10% over 12 months and 28% over five years. As a result, the trailing yield has climbed to 6.64%.
REITs have had a difficult few years as higher interest rates increased borrowing costs and hit property valuations.
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Yet LondonMetric’s net rental income rose 16.6% to £455.3m in its latest full year, while EPRA earnings climbed 13.9% to £305.3m. The dividend increased 3.8% to 12.45p and was 108% covered by earnings.
That’s encouraging, although debt costs are a worry, especially if inflation threatens to drive interest rates higher. The share price has been patchy, but the income is excellent.
Imperial Brands
Imperial Brands (LSE: IMB) is the tobacco giant behind brands including Winston, Gauloises and Davidoff. Its shares have fallen 18% over the last year, but they’re still up a thumping 65% over five years, with dividneds on top. Its trailing yield is 6.47%.
It’s still generating heaps of cash. In its latest half-year results tobacco net revenue rose 1.5%, while new-generation products grew 7.5%. Smoking volumes are falling overall, of course, and regulation remains a threat.
Whatever your personal view of Big Tobacco, it has shrugged off all the challenges to become a terrific source of dividend income and share price growth.
All three are worth considering for investors seeking high income. They’ve all been patchy, but that’s partly why the yields are so generous.
Split £20,000 equally and the average yield of 6.86% would produce a passive income around £1,372 a year. That may grow steadily over time, if investors reinvest their dividends and boards keep hiking payouts. Not convinced? I can see other tempting FTSE 100 income stocks out there today…
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Harvey Jones owns shares in Legal & General Group.
This story originally appeared on Motley Fool
