As we head into 2025, the UK stock market remains an attractive destination for income investors, with a wide selection of high-yielding dividend stocks. In this article, we'll explore three UK dividend stocks that offer yields up to 9.8%, providing investors with a solid foundation for generating passive income.

1. Phoenix Group Holdings (PHNX) - Yield: 9.8%
- Phoenix Group Holdings is a leading UK life and pensions provider, with a strong track record of dividend growth and a robust balance sheet.
- The company's high dividend yield is supported by its stable earnings and cash flow generation, making it an attractive choice for income investors.
- PHNX's dividend payout ratio is around 70% of earnings, indicating that the company has room to maintain or increase dividends even if earnings fluctuate.



2. British American Tobacco (BATS) - Yield: 9.05%
- British American Tobacco is a global tobacco and nicotine company with a strong presence in emerging markets.
- The company's high dividend yield is supported by its stable earnings and cash flow generation, as well as its strong brand portfolio.
- BATS has a history of dividend growth, with a 10-year compound annual growth rate (CAGR) of 10.5%, and a dividend payout ratio of around 60% of earnings.



3. Vodafone Group (VOD) - Yield: 10.69%
- Vodafone Group is a global telecommunications company with a strong presence in Europe and Africa.
- The company's high dividend yield is supported by its stable earnings and cash flow generation, as well as its efforts to reduce debt and improve its financial position.
- Vodafone has a history of dividend growth, with a 10-year CAGR of 2.5%, and a dividend payout ratio of around 70% of earnings.



In conclusion, these three UK dividend stocks offer attractive yields up to 9.8%, providing investors with a solid foundation for generating passive income. While each company faces its own set of risks and challenges, their strong financial performance and dividend track records make them worthy of consideration for income-focused portfolios. As always, it's essential to conduct thorough research and consider your investment goals and risk tolerance before making any investment decisions.