Of the 39.1 million taxpayers in the UK, 8.7 million are over state pension age. And that’s up 29% since income tax thresholds were frozen in 2021/22.
So, with more and more pensioners paying tax, can investors make use of tax efficient wrappers like Stocks & Shares ISAs and Self-Invested Personal Pensions (SIPP) to boost their income while also sheltering it from tax?
This article isn’t personal advice. Investments can rise and fall in value, so you could get back less than you invest. Pension, ISA and tax rules can change, and benefits depend on your circumstances. If you’re not sure if an action is right for you, ask for financial advice.
Investing for income
Funds focused on income are an easy way to access a diversified range of assets paying regular income with the potential for long-term capital growth.
Because funds invest in lots of underlying assets, investors aren’t impacted as much if, for example, one company cuts its dividend or defaults on its bond payments. The idea is the remaining investments can make up for the shortfalls. At the same time you get an expert fund manager looking after the day-to-day decision making.
Funds are a great addition to a portfolio invested for income because they also offer flexibility. You can top up or sell your investment depending on your needs.
With that in mind, here are three funds investing differently but still aiming to provide income. Note that yields on all investment funds aren’t guaranteed and can change over time. All of these funds take charges from capital which can increase the income but reduces the potential for capital growth.
Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.
For more details on each fund, its risks and charges, use the links to their factsheets and key investor information.
Artemis High Income
Artemis High Income mainly invests in bonds and aims to pay a higher income than other bond focused funds.
Around 15% is invested in UK and European shares too, which provides diversification but adds risk compared to some other bond funds. It focuses on high yield bonds – investors in these bonds should be rewarded with a higher income, but it’s a higher risk approach.
Managed by David Ennett and Jack Holmes since 2021, with share selections from Ed Leggett, we think this fund is a great option for investors looking for income.
The yield on the Artemis High Income fund was 5.58% on 31 December 2025.
Janus Henderson UK Responsible Income
Janus Henderson UK Responsible Income invests in UK companies and aims to provide income alongside long-term capital growth. The manager, Andrew Jones, avoids companies that some investors find unethical, like tobacco and oil & gas companies. This means the fund can perform differently to other UK funds. Jones has managed the fund since 2012, having joined the UK Equities team at Henderson in 2005.
We think this is a great option to diversify an income portfolio focused on bonds, global stock markets, or even one focused on the broader UK stock market.
The yield on the Janus Henderson UK Responsible Income fund was 3.70% on 31 January 2026.
The fund can invest in smaller companies which increases risk.
Baillie Gifford Monthly Income
Baillie Gifford Monthly Income invests in shares, bonds, property, and infrastructure. It aims to provide a resilient income that increases by more than inflation over the long term.
This mix of investments means the fund doesn’t rely on just a single type of asset to generate the income and gives the team plenty of options to choose from.
The fund’s managed by Steven Hay, Lesley Dunn, Jon Stewart, and Nicoleta Dumitru. Each manager has a different specialist investment area. They also have the support of other teams at Baillie Gifford, so investors benefit from a range of expertise, which we think has the potential to help long-term performance.
The yield on the Baillie Gifford Monthly Income fund was 4.10% on 31 January 2026.
The fund invests in emerging markets, high yield bonds, and derivatives, all of which add risk.
Annual percentage growth
31/01/2021 To 31/01/2022 | 31/01/2022 To 31/01/2023 | 31/01/2023 To 31/01/2024 | 31/01/2024 To 31/01/2025 | 31/01/2025 To 31/01/2026 | |
|---|---|---|---|---|---|
Artemis High Income | 4.21% | -4.94% | 7.21% | 11.28% | 9.04% |
IA £ Strategic Bond | -0.49% | -7.63% | 4.95% | 5.70% | 6.89% |
Janus Henderson UK Responsible Income | 12.32% | 2.61% | 5.23% | 10.73% | 14.67% |
IA UK Equity Income | 18.91% | 2.53% | 1.25% | 14.42% | 17.38% |
Baillie Gifford Monthly Income | 5.57% | -3.02% | 5.19% | 5.43% | 7.84% |
IA Mixed Investment 40-85% shares | 6.36% | -2.47% | 4.46% | 12.72% | 9.77% |