Investors seeking out a decent income are the great victims of the last few years' financial turbulence. Interest rates have sunk without a trace and big companies have been cutting dividend payouts with abandon – the top 100 companies on the London market now pay out a relatively puny 3.5 per cent in dividends.
With yields so low, it's little wonder that vast amounts of money have been flooding into anything that pays out a decent yield – business is booming for the giant corporate bond funds with unprecedented cash inflows. Money has also been flooding into high street and online savings accounts which pay out a fixed one- to three-year term with rates in some cases above 4 per cent a year. But investing for an income needs to be driven by more than just the headline rate – there is a huge range of factors that contribute towards building a portfolio of assets that could generate an income.
