3 top passive income stocks with yields above 5% to consider for a SIPP
A Self-Invested Personal Pension (SIPP) is the ideal place to reinvest dividends over and over again to let them compound. Most SIPP providers even let you automate the dividend reinvestment process, making it totally hassle-free.
Here are three UK income stocks that I reckon deserve a place on investors’ radars today.
TBC
Let’s start with probably the most obscure: TBC Bank (LSE:TBCG). This is one of two dominant banks in Georgia on the edge of Europe. Both are listed in the FTSE 250, though rival Lion Finance (formerly the Bank of Georgia) will join the FTSE 100 later this month
This shows how well these bank stocks have done, with TBC up nearly 300% in five years, with dividends on top. However, despite this impressive rise, the forecast dividend yield is a juicy 6.6% (almost double the FTSE 250).
The dividend prospects look strong to me, with the Georgian economy tipped to grow very strongly in the coming years. This is due to booming tourism and Georgia’s position as a logistics and trade hub between Europe and Asia.
Naturally, this growth is dependant on Georgia’s economy and global trade remaining buoyant. If there’s an economic downturn, the bank’s share price would reflect that.
However, TBC remains one of the most profitable lenders in Europe, and its digital bank in Uzbekistan is growing quickly.
Londonmetric
Next, we have Londonmetric Property (LSE:LMP), which is a very different proposition. It’s a real estate investment trust (REIT) from the FTSE 100 with a £7.4bn portfolio across 680 assets.
These are focused on urban logistics, convenience, healthcare, and leisure and entertainment. So respective tenants in these areas include Amazon, Aldi, private hospital operator Ramsay Health Care, and Premier Inn.
Now, the big risk here is that REITs like Londonmetric are sensitive to changes in interest rates. And with the Iran conflict spilling out into the Middle East and causing chaos in energy markets, inflation could spike and prevent rates from heading lower.
This is reflected in the share price, which has dipped 6% in recent days. However, the silver lining is that this has pushed the forecast dividend yield up to 6.4%.
With this level of income on offer, I think the stock looks attractive right now. Londonmetric’s occupancy rate is just above 98%.
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Aviva
Last but not least, there’s Aviva (LSE:AV.). This week, the insurance giant delivered a cracking set of results for 2025 — it’s fifth straight year of strongly growing profits.
Operating profit jumped 25% to £2.2bn, with general premiums up by 18%. This smashed its original £2bn operating profit target one year early!
CEO Amanda Blanc said: “[T]here is so much more to come. Aviva has many in-built advantages which set us up well for future success, including our unrivalled scale with almost 22m UK customers, our diversified model and market-leading technology.”
The final dividend was hiked 10% and a £350 share buyback programme has commenced.
Despite this impressive showing, the stock is down 8% in the past week. This puts the forecast dividend yield at an alluring 6.5%, one of the highest in the FTSE 100.
Aviva is not risk-free, as a return of inflationary pressures could dampen demand for its insurance products. But I see this dip as an excellent buying opportunity to consider for passive income.
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Ben McPoland has positions in Aviva Plc and LondonMetric Property Plc. The Motley Fool UK has recommended Amazon and LondonMetric Property Plc. 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.
