My Top 5 Income Generating Assets in the UK

Today I’m going to look at five income-generating assets that are worth owning in the UK, and what has changed for each of them.

A good book can change how you behave with money. Rich Dad Poor Dad was one such book for me. The story of a boy with two dads, one a broke teacher and the other a wealthy businessman, isn’t great literature, but one lesson stuck:

“Rich people buy assets that generate income. Poor people buy liabilities that they think are assets (big homes, cars, toys). Assets put money into your pocket; liabilities take it out.”

Since reading it, I’ve made it a priority to save part of what I earn and invest it in assets that pay an income. Investing for income is one of the most reliable ways to build passive income, but not every income asset is worth owning. These are the five I’d look at.

When investing, your capital is at risk and you may get back less than you invest.

1. Dividend-paying ETFs

Established companies share part of their profits with shareholders as dividends. A dividend ETF holds dozens or hundreds of these companies in one fund, so you get a stream of dividends without having to pick and monitor individual shares. You can choose distributing ETFs, which pay dividends out as cash, or accumulating ETFs, which reinvest them for you.

Hold your ETFs in a Stocks and Shares ISA if you can. Outside an ISA, UK investors only get a £500 dividend allowance a year, and dividends above that are taxed.

How to invest in ETFs

Choose a regulated platform with low fees. eToro is one option: it charges no commission on real stocks and ETFs for UK clients (other fees may apply) and lets you buy fractional shares. UK clients can hold a GBP account with free withdrawals, and eToro also offers a Stocks and Shares ISA. Moving money to the USD account to buy US-listed assets costs 0.75%. You can practise with a demo account, and the CopyTrader feature lets you copy other investors. eToro (UK) Ltd is authorised and regulated by the FCA (FRN 583263).

For more information, see our eToro review.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 52% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

2. Peer-to-peer (P2P) lending

With P2P lending, you lend money to individuals or businesses through a platform and receive interest in return. I used to invest with RateSetter and Assetz Capital, but the market has changed a lot:

• RateSetter was bought by Metro Bank and closed to retail investors.
• Assetz Capital closed its retail platform to new investment on 15 December 2022 and is running off its existing loans.

A few smaller UK platforms still accept retail investors, and you can hold P2P loans in an Innovative Finance ISA. However, P2P lending is not covered by the Financial Services Compensation Scheme (FSCS). If borrowers default or the platform fails, you can lose money, and you may not be able to withdraw quickly.

The bar is also higher than it used to be. With the Bank of England base rate at 3.75%, the best easy-access savings accounts pay far more than the 0.7% I used to earn, with FSCS protection up to £120,000. A P2P loan needs to pay well above that to justify the extra risk.

3. Buy-to-let property

Buy-to-let can provide monthly rent and long-term growth, and it makes up a large part of many investors’ portfolios, including mine. The rules have become tougher, though:

• Mortgage interest: individual landlords can’t deduct mortgage interest from rental income. They get a tax credit at the basic rate (20%) instead, which hurts higher-rate taxpayers.
• Stamp duty: buying an additional property in England costs an extra 5% in stamp duty on top of the standard rates.
• Higher tax on rent: from April 2027, tax rates on property income in England, Wales and Northern Ireland rise by 2 percentage points, to 22%, 42% and 47%.
• Renters’ Rights Act: since 1 May 2026, landlords in England can no longer use section 21 “no-fault” evictions, and rent can only be increased once a year.

Buy-to-let can still work if you buy carefully and run the numbers after tax, maintenance, voids and letting fees. If being a landlord isn’t for you, there’s another way to get property income.

4. REITs (real estate investment trusts)

REITs are listed companies that own property, such as warehouses, offices, care homes or shops. They let you invest in property without a deposit, a mortgage or tenants to manage.

REITs offer some advantages to smaller investors:

• You can start with a small amount and buy or sell on the stock market.
• Your money is spread across many properties instead of one house.
• UK REITs must pay out at least 90% of their rental profits to shareholders, so they tend to pay higher dividends.
• You can hold them in a Stocks and Shares ISA.

REIT share prices can fall, especially when interest rates rise, and dividends can be cut. Look at sectors with long-term demand, such as logistics warehouses (driven by online shopping) or healthcare property (driven by an ageing population), and compare each REIT’s debt, occupancy and dividend history. A property ETF is a simpler way to spread your money across many REITs.

5. Online businesses: blogging

Blogs can earn money through affiliate commissions and advertising, and some make a full-time income. It’s a high-effort, high-risk route, and search traffic has become harder to win as Google shows more AI-generated answers, but it can still build a valuable asset.

How to start a blog

Pick a domain name quickly, as it matters less than you think. Then choose a hosting provider. WP Engine is faster and more reliable than entry-level hosts, but it costs more. Install WordPress and a lightweight theme, plus a caching plugin for speed and a security plugin.

After that, it’s all about content and SEO. If you want a structured course, I recommend Mike Pearson’s Stupid Simple SEO course.

How to monetise a blog

Write about something you know, but match it to what people search for. Start with keyword research and a content calendar. There are two main ways to earn:

• Affiliate marketing: you earn a commission when a reader buys a product you recommend. Networks such as ShareASale list thousands of merchants.
• Advertising: you earn per 1,000 visitors, so you need a lot of traffic.

How to sell a blog

Established websites are often valued at a multiple of their monthly profit, typically between 20 and 36 times, depending on the site’s age, traffic sources, backlinks and income streams. At 36 times monthly profit, a buyer earns back the price in three years, a return of about 33% a year if profits hold. If you’d rather buy than build, Flippa is a marketplace for established online businesses.

Wrapping up

Financial independence happens when your passive income covers your costs, so work becomes optional. The quickest route for most people is to save as much as possible and invest it in assets that produce income.

My advice is to start early and invest a small amount regularly. Dividend ETFs in a Stocks and Shares ISA have the lowest barrier to entry. Property, through buy-to-let or REITs, adds rental income, and an online business can grow into a valuable asset if you’re willing to put in the work. Whatever you choose, check the costs and the taxes, and only invest money you can afford to leave invested for several years.