Bonds vs Shares: Where should income investors look?

Ten-year UK Gilts are offering around 5.4%—so how do they compare with UK shares for investors seeking income? This video examines the changing case for bonds and equities.

With UK Government borrowing costs near their highest levels since 2007, bonds are becoming more significant for income investors. But the FTSE 100 continues to offer dividends, share buybacks and potential takeover activity, creating a different source of income and potential capital growth.

AJ Bell Investment Director Russ Mould compares the two asset classes, looking at Gilt yields, inflation, interest rates, FTSE 100 earnings and dividend forecasts.

In this video you'll learn:

• Why rising Gilt yields matter for income investors
• The risks inflation presents to bond investors
• How the FTSE 100's earnings yield compares with Gilts
• Why 2026 FTSE 100 dividends could reach £90.3bn
• How £46.7bn of planned buybacks affect shareholder returns
• Why higher bond yields can eventually weigh on share prices
• What investors should consider when comparing bonds and equities