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The FTSE 100 boasts some of the most exciting dividend shares in the world. Today, itâs possible to get yields of 6%, 7%, even 8% from UK blue-chips, smashing the return on cash. So what’s out there?
Let’s start right at the top. The two highest yielders are both insurance companies. Their names? Legal & General Group (LSE: LGEN) and Standard Life (LSE: SDLF), which recently rebranded from Phoenix Group. Today, they yield 8.66% and 7.33%, respectively.
So how much income would an investor get?
Now let’s say an investor split their entire £20,000 Stocks and Shares ISA contribution equally between these two high-yield heroes. They’re forecast to yield 8.83% and 7.56% across 2026, respectively. The combined average yield is just under 8.2%. Based on that, somebody who invested a £20k ISA would potentially deliver a beefy income of £1,639 in the year ahead.
I think that’s a terrific return, and any share price growth is on top (the shares could fall, of course). The yield is likely to climb after that as both companies plan to increase shareholder payouts by around 2% a year. Also, if an investor reinvests their dividends they’ll accumulate even more shares, and get more income. That’s the beauty of long-term investing, as the total return compounds over time.
My simple table shows how their yields are expected to build, based on todayâs share prices. Not guaranteed, of course.
| Stock | 2025 trailing yield | 2026 forecast yield | 2027 forecast yield |
| Legal & General | 8.66% | 8.83% | 9.05% |
| Standard Life | 7.33% | 7.56% | 7.83% |
So why are their yields so high? Both stocks have a good track record of increasing shareholder payouts, with only a handful of hiccups. Their shares have been less consistent.
The Legal & General share price is up just 4% over the last year, and down around 10% over five. The Standard Life share price has climbed 26% in the last year, but that follows a bumpy 2023 and 2024. Over five years its shares are up just 5%. Investors will still be comfortably ahead with dividends reinvested. They’ve yielded 10% at times.
So are those yields sustainable? One way of measuring this is to look at the companyâs Solvency II ratio. At Legal & General, itâs a solid 220%. That dipped slightly in 2025, but mostly because it launched a £1.2bn share buyback, the biggest in its history.
Are these income heroes worth buying?
Standard Lifeâs Solvency II ratio was 176% in 2025. Thatâs nicely within its target range of 140%â180%, supported by strong operating cash generation. I think the income should hold, but dividends are never guaranteed.
Every stock has risks. Today’s wider uncertainty could rattle the shares, and hit the value of assets under management. They also need to pioneer new areas of business to keep the cash flowing, in a competitive market. Legal & General looks good value with a modest forward price-to-earnings ratio of 8.7. Standard Life is pricier at around 17, which reflects the recent share price spike.
I hold both stocks myself, and I think they’re a terrific way to generate long-term dividend income, and with luck, share price growth too. I think they’re well worth considering today, to build long-term wealth for retirement.
The post How these 2 dividend shares could help an ISA investor target a £1,639 income in 2026 appeared first on The Motley Fool UK.
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Harvey Jones has positions in Legal & General Group Plc and Standard Life. 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.
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