Is the FTSE 100 good for passive income?

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Those who invest for passive income will be interested to learn that the FTSE 100, according to those who look after the index, currently (9 May) offers a yield of 3.58%. This is based on amounts paid over the past 12 months.

Number crunchers appear to agree this is higher than all other major global stock market indexes, although Australia’s ASX 200 is a close second.

In 2025, AJ Bell reckons members of the FTSE 100 will pay £83bn in dividends. This implies a forward yield of 3.7%. The investment platform claims that analysts are forecasting 89 Footsie stocks to increase their payouts this year.

This is good news for investors like me, who prefer to buy UK shares. Of course, dividends are never guaranteed. But in my opinion, the index provides some excellent passive income opportunities.

Returns can differ significantly

However, the average yield hides a wide disparity in…

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