Best Income Funds for Retirement in the UK 2025

Retirement is about having the freedom to enjoy life without constantly worrying about where your next bit of income is coming from. That’s why the best retirement income funds exist: they turn your investments into a steady, predictable cash flow, letting you focus on what really matters.

But with so many options out there, how do you choose the best retirement investment and the best UK income funds for newly retired investors?

Some focus on high-yield UK stocks, others spread their reach globally, and some blend growth with income to keep your money working even in retirement.

To make things easier, we’ve rounded up six of the best income funds for retirees, each designed to keep your financial future on solid ground while letting you enjoy the freedom you’ve worked so hard for.

What are the best income funds for retirement?

When you stop earning a salary, your portfolio needs to pick up the slack. Retirement income funds do this by investing in assets that generate regular payouts, usually through dividends or bond yields. 

Unlike accumulation funds that reinvest earnings, income funds distribute profits straight into your pocket, making them a go-to option for retirees looking for predictable cash flow.

Here’s what separates the best from the rest:

• Consistent payouts – You don’t want unpredictable income streams when bills come every month.
• Sensible risk levels – A mix of reliable stocks and bonds can prevent nasty surprises.
• Diversification – The right balance of UK and global exposure can keep your portfolio stable.
• Reasonable fees – High costs can eat into your returns, so picking funds with fair charges matters.

Now, let’s see six of the best income funds for retirees that get this balance right.

Best UK income funds for newly retired

BlackRock UK Income Fund

For those who prefer sticking close to home, the BlackRock UK Income Fund delivers steady UK-based dividends from well-established companies. It focuses on reliable sectors like healthcare, consumer staples, and financials, industries that hold up well even in turbulent markets.

Key features

• Targets blue-chip UK stocks with a strong history of dividend payouts.
• Prioritises stability over risky high-yield bets.
• Yield typically lands around 3.6%, though it fluctuates with market conditions.

Martin Currie UK Equity Income Fund

Some funds chase yield, others focus on stability. Martin Currie UK Equity Income Fund strikes a perfect middle ground. It spreads its bets across the UK’s most resilient dividend-paying companies, mixing a solid payout with long-term growth. This is best for retirees who want reliable income today while keeping their investments growing for the future.

Key features

• Combines solid dividends with long-term capital appreciation.
• Avoids over-reliance on high-yield stocks that may cut dividends in downturns.
• Delivers a 3.6% yield with relatively low volatility.

HL Global Equity Income Fund

The UK market has its strengths, but it’s a bit like putting all your eggs in one basket. The HL Global Equity Income Fund spreads its wings across international markets, tapping into dividend-paying companies worldwide to create a diversified, steady income stream, an advantage when markets get rocky.

Key features

• Reduces risk of relying solely on UK stocks
• Focuses on high-quality global dividend stocks
• Expected 3.5%-5% yield, depending on market conditions

👉 Read our Hargreaves Lansdown review to learn more.

JPMorgan Global Growth & Income & JPM Global Equity Income

JPMorgan brings not one, but two income funds worth your attention, and together, they offer an excellent mix of growth and dividends.

JPMorgan Global Growth & Income aims to give investors both a decent payout and capital growth, so your money works for you.

JPM Global Equity Income focuses purely on stable dividend payers across global markets, ensuring a reliable income stream.

Key features

• Offers both income and long-term growth, which is a rare combo. 
• Both funds sit in the 3.5%-4% yield range.
• Global diversification lowers risk.

Fidelity Global Enhanced Income & Fidelity Global Dividend

For those who want more income bang for their buck, Fidelity has two heavyweight funds that take income investing up a notch while keeping risk in check. 

Fidelity Global Enhanced Income uses an options overlay strategy to squeeze out extra income from global dividend stocks, making it ideal for retirees who want higher payouts.

Fidelity Global Dividend keeps things simpler but still delivers strong dividends with growth potential. 

These are ideal for those wanting higher income without taking on unnecessary risk.

Key features

• Fidelity’s Enhanced Income fund actively works to boost your payouts, while the Dividend fund keeps things steady and reliable.
• Yield is around 4-5% for Enhanced Income, 3.5%-4.5% for Dividend.
• Both give exposure to global markets, reducing reliance on UK stocks.

Vanguard UK Equity Income Fund

Vanguard’s UK Equity Income Fund is a low-cost, actively managed mutual fund designed to provide retirees with a steady income by investing in high-quality UK dividend-paying companies. This fund balances income generation with long-term capital growth, making it well-suited for investors who want a reliable income stream without excessive fees. Its disciplined approach targets sustainable dividends across a diversified portfolio of established UK businesses.

Key features

• Focuses on large and mid-cap UK companies with strong dividend histories.
• Emphasises low fees compared to many active funds, improving net returns.
• Yield typically ranges between 3.5% and 4%, depending on market conditions.
• Suitable for retirees seeking a blend of income and growth with cost-efficiency.

👉 For more information read our Vanguard review.

How to pick the right income fund for you

Some retirees prefer the reliability of UK-focused funds, while others seek global diversification to spread risk across multiple economies. The choice comes down to how much income you need, how much risk you’re comfortable with, and whether you want your investments to simply provide income or continue growing over time. At this stage, it’s also worth considering whether a pension or ISA best suits your retirement strategy, as both offer different tax advantages and flexibility.

For those who prefer a UK-based approach, BlackRock UK Income and Martin Currie UK Equity Income focus on well-established dividend payers, offering steady, homegrown income with relatively low volatility. If spreading risk beyond the UK feels like a smarter move, the HL Global Equity Income Fund ensures that income isn’t tied to the ups and downs of a single economy.

If you’re looking for a mix of income and long-term growth, JPMorgan’s Global Growth & Income and Global Equity Income funds offer a carefully managed approach. These funds prioritise steady dividend payouts while still allowing room for capital appreciation, helping retirees maintain purchasing power over time. 

On the other hand, those who want to maximise their income might find Fidelity’s Global Enhanced Income Fund a compelling choice. By using an income-boosting strategy, it aims to provide higher payouts without relying on riskier, unsustainable yields.

If you're still exploring investment options, understanding which is the best stocks and shares ISA can help you choose a tax-efficient way to grow your wealth while ensuring a reliable income stream for retirement.

Key information

The best income funds for retirees aren’t just about big dividends. They’re about financial security. The right fund (or mix of funds) can provide a steady income stream, protect your capital, and even offer long-term growth, so you never have to worry about running out of money in retirement.

Take a moment to assess your financial goals, think about how much income you need, and make sure your investments work as hard as you did to earn them. If in doubt, consider speaking to a financial adviser to find the perfect fit for your retirement plan.

FAQs

Should I Invest in Property or a Pension for Retirement?

Choosing between property and a pension depends on your personal circumstances and goals. Property can offer rental income and potential appreciation but requires active management and comes with risks like vacancies and maintenance. Pensions provide a tax-efficient, professionally managed way to save for retirement, often with employer contributions and built-in protections. Many investors find a balanced approach, combining both, works best to spread risk and build steady income.

Are Pensions a Reliable Way to Save for Retirement?

Yes, pensions are generally a reliable and secure method for retirement savings. They are regulated and often come with safeguards like the Pension Protection Fund. While investment risks exist, pensions are managed to balance growth with security. Choosing the right pension plan and monitoring it regularly helps ensure your savings stay on track to meet your retirement income needs.

How Often Should I Review My Retirement Investments?

It’s recommended to review your retirement investments at least once a year, or more frequently if there are significant life changes or market volatility. Regular reviews help ensure your investment strategy remains aligned with your retirement timeline, risk tolerance, and income needs. This proactive approach allows you to make adjustments as needed, maximising the potential for a comfortable retirement.