Got £500? These income shares could unlock up to £67.50 in passive income
Even with UK stocks reaching record highs in 2025, there are still plenty of income shares offering attractive dividend yields. And across the entire London Stock Exchange, two of the highest payouts currently on offer come from Reach (LSE:RCH) at 13.5% and Ashmore Group (LSE:ASHM) at 10.8%.
That means with just £500, an investor can theoretically start earning anywhere between £54-£67.50 in passive income right now.
So is this a trap? Or is it a screaming buying opportunity that everyone else is ignoring?
Inspecting Reach
Letâs start with the most generous payout of 13.5%. As a quick reminder, Reach is one of the largest commercial news publishers in Britain with brands including the Daily Mirror, Daily Express, and Daily Star within its portfolio.
When adding all of its other brands, websites, and publications, roughly 70% of the UK population engages with its content each month. And management’s using this impressive reach (pardon the pun) to upsell its advertising slots to other businesses.
However, despite this monopoly-style grip on the UK advertising space, the shares have taken a chunky 30% hit since the start of the year, sending the dividend yield into double-digit territory.
The problem is that the company still generates a substantial portion of its revenue from print advertising â something thatâs been in decline for several years. And while management has made efforts to diversify its revenue stream into the digital space, weak consumer spending has dampened digital advertising demand.
Despite this, the leadership appears to be confident that better times are ahead. In its latest results, while revenue continues to be squeezed, cost-saving initiatives have helped deliver a 5.9% increase in earnings per share along with some operating margin expansion.
If a rebound in economic activity materialises and management can leverage its newly forming digital presence, revenue could be restored, protecting shareholder payouts in the process.
Challenging emerging markets
Another income stock thatâs encountered challenges of late is Ashmore Group. Even with emerging market stocks outperforming in 2025, this asset management business has struggled to plug the leak of client funds.
Thatâs particularly problematic since Ashmore generates the bulk of its earnings from management fees. And with fewer assets to manage, the firmâs net revenue has been feeling the pinch. In fact, in its 2025 fiscal year (ending in June), both underlying sales and profits tumbled by 22% and 34% respectively. Yet dividends remained unchanged.
Right now, the company isn’t generating enough profit to cover shareholder payouts. And it’s even begun to sell some of its investments to cover the cost. But management’s betting on the continued outperformance of emerging market stocks to re-attract investor capital, especially now that US tech stocks are starting to lose their popularity due to AI bubble concerns.
A risk worth taking?
Both businesses have rebound potential on the horizon. However, neither appears to be in the driving seat. Reach is relying on a wider UK economic comeback, while Ashmore is placing its fate in the hands of external emerging economies.
As such, the fate of both of their impressive dividend yields appears to be ultimately out of managementâs control. Put simply, these stocks represent a high-risk, high-reward investment. But with other lower-risk passive income opportunities to choose from, Iâm not rushing to buy either.
The post Got £500? These income shares could unlock up to £67.50 in passive income appeared first on The Motley Fool UK.
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
