Are these the best FTSE 100 dividend stocks to watch in October 2025?

Back in April, the FTSE 100 experienced significant volatility, dropping from 8634 points to 7679 points due to economic uncertainties surrounding US tariffs and a potential trade war.

It has since rallied, now standing at 9189 points, as the US stock market is seen to be an increasingly high-risk investment under President Trump, and many investors look to redistribute their capital to other stock markets like the FTSE 100. 

FTSE 100 macroeconomics

After meeting the Bank of England’s (BOE) CPI inflation target rate of 2.0% on 2 August 2024, interest rates have gradually been reduced and currently stand at 4%.

Since August last year, inflation has risen to 3.8%, which is largely due to increased prices of food and air fares.

At its most recent meeting on 9 August, the BoE cut interest rates by 0.25 basis points. Although further cuts are expected later this year, with inflation still rising, these cuts are likely to be more gradual.

Then there’s the AI-fuelled surge of the US tech stocks to consider. This may be a sustainable rise given the tech advances at hand, or it may be a bubble that eventually bursts. If the latter, this excess capital may find itself within FTSE 100 dividend stocks until the storm blows over.

This all makes investing in FTSE 100 dividend stocks complex. In particular, the highest dividend yields can be hostage to economic policy, where individual investment cases and changing financial landscapes can create value traps or payout irregularities.

Open an account and start trading some of the top UK dividend stocks in 2025.

Best FTSE 100 dividend shares to watch

These shares are the highest yielding on the index, with a dividend cover ratio of 1 or higher as of October 2025. Remember: they may not be the best investments, and the dividends and capital itself are not guaranteed. 

B&M (Dividend yield: 11.4%)

B&M is a retail company with 707 stores situated across retail parks, shopping areas and town centres throughout France and the UK. Its stores offer a variety of items which include food, homeware, clothing and pet products.

The company reported steady Q1 results with revenues increasing by 4.4% largely due to new store openings and growth in LFL sales. Over the next year, B&M are looking to continue expanding by opening 73 new stores.

The company has recently announced a dividend payment of 9.70p per share, which was paid out on 1 August this year. Although future dividend payments aren’t guaranteed, the company’s healthy cover ratio of 4.5 positions it well for future payouts.

WPP (Dividend yield: 8.9%)

UK-based advertising company WPP helps businesses increase customer reach through a range of services, including market research, digital marketing, media buying, and public relations.

WPP has reported a weak H1 with poor performance expected to continue into the latter half of the year. As a result, the company has lowered its full-year guidance with revenues now expected to fall by as much as 5%, while its operating profit margin could decrease by up to 1.75%.

In an attempt to improve performance, the company is restructuring and looking to prioritise faster-growing markets, such as using advanced technologies to help clients succeed online. The success of this approach remains to be seen.

The company has recently announced a dividend payment of 7.50p per share, which will be paid to shareholders in November. This is down from 15.00p the year before. Although its weak performance may prevent future payments, its cover ratio of 2.1 suggests it’s well placed for these to continue.

Phoenix (Dividend yield: 8.6%)

Savings and retirement company Phoenix Group reported strong results throughout 2024, with operating profit up by 31%, driven by a good performance in savings, pensions and retirement solutions. As a result, the company has upped its 2026 guidance from £900m to £1.1bn.

On 3 April this year, Phoenix Group paid a dividend of 27.35p to shareholders, up from 26.65p the year before. With a cover ratio of 6.0, the company appears well-positioned to offer strong dividend payments for the rest of the year.

Phoenix remains optimistic about its performance for the rest of the year, with plans to continue investing in growth and reducing debt.

LondonMetric Property (Dividend yield: 6.8%)

Real estate investment trust LondonMetric Property reported a strong FY25 with net rental income increasing by 123% to £390.6 million and EPRA earnings up 120% to £268 million. This success was largely due to the mergers and acquisitions that took place in FY24.

The company has recently announced a dividend payment of 3.05p, which is due to be paid to shareholders this month. This is up from 2.85p the year before. With a dividend cover ratio of 1.7, the company seems well-positioned to continue dividend payments into FY26.

Our analysts have given this stock a buy rating with an average price target of 189p over the next 12 months.

M&G (Dividend yield: 8.1%)

Savings and investment company M&G has two main arms to the company: life insurance and asset management. The way in which these two segments work together can be beneficial, but it is typically quite complex and difficult for everyday investors to understand, which can potentially limit demand.

The company performed well throughout 2024 and beat its profit expectations due to successful cost-cutting and strong performance from its asset management segment. It also announced plans to increase dividend payments to shareholders each year if funds permit.

On 27 March this year, the company announced an interim dividend of 13.50p, which was paid to shareholders in May. With a dividend cover of 3.2, M&G generates more than three times the earnings needed to fund its payout, suggesting the dividend is well-supported if current performance continues.

Looking ahead, the company plans to expand its Asset Management and Wealth divisions so they contribute around half of overall profits, while gradually winding down its annuity portfolio and legacy products.

How to invest or trade in FTSE 100 dividend stocks

1. Learn more about FTSE 100 dividend stocks
2. Decide whether you want to trade or invest
3. Open an account 
4. Search for your chosen stock on our web platform or app
5. Make your investment or trade

When you invest in a share, you buy it outright with the view that it’ll increase in value over time.

Trading takes a more short-term view where you look to take advantage of smaller market movements. It involves leverage, which allows you to take a position that’s larger than your initial deposit. This means market movements are magnified, and you could gain or lose money faster than expected.

For example, if you trade with 5:1 leverage, you could place a £1000 deposit and manage a £5000 position. A 10% increase or decrease in the market could result in 50% profit or loss on your initial margin.

Negative balance protection will prevent you from losing more than your initial deposit, but market movements can be fast and unpredictable, and you could lose your full deposit.