A Stocks and Shares ISA makes a brilliant home for dividend-paying UK shares. All shareholder payouts are tax-free, whether you reinvest them or draw them as income.

The good news is that plenty of FTSE 100 and FTSE 250 stocks offer attractive yields of 5%, 6% and in some cases more than 7%. With luck, that income should steadily rise as you reinvest dividends and companies increase payouts.

Nothing is guaranteed in investing, but I think these two FTSE 100 dividend stars are worth considering for an income portfolio today.

M&G: a favourite of mine

I’ve done brilliantly from wealth manager M&G (LSE: M&G). Its shares are up 20% over 12 months and 58% over five years, with dividends on top.

When I bought them, they yielded a stunning 10%. Such a dizzying yield can be a warning sign, but I believed it was sustainable. So far, I’ve been proved right. However, as the shares have climbed, the yield has slipped to 6.63% for new buyers. Still generous though. The board is also targeting annual dividend growth of around 2%. Although right now, that’s below inflation.

In the first half of 2026, M&G’s adjusted operating profit rose a solid 15% to £435m, driven by stronger asset-management revenues and growth in its life insurance business.

There are risks. A stock market crash could discourage customers from investing and reduce the commission-based fees M&G earns. It also operates in fiercely competitive markets, and is currently fighting a battle royale to win bulk annuity business from pension schemes. Passive tracker funds remain a constant challenge to its active management model.

The trailing price-to-earnings ratio of 25.5 looks toppy, but forecasts suggest it could fall to 11.4 next year as earnings rise. I think it’s well worth considering.

LondonMetric: patience required

LondonMetric Property (LSE: LMP) offers an even higher yield of 6.81%, although its share-price performance has been much less impressive. It’s down around 3% over a year and 33% over five.

This is a real estate investment trust, or REIT. These companies must distribute at least 90% of qualifying property rental profits to shareholders, making them natural income investments.

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LondonMetric has increased its dividend for 11 consecutive years, including a 3.75% increase in 2026. Management wants to keep that run of hikes going to 25 years and beyond.

Like many REITs, LondonMetric has been hit by rising inflation and interest rates. Higher borrowing costs make acquisitions and refinancing more expensive, while falling property valuations hit sales potential and undermine investor confidence. Tenants face their own cost pressures, potentially affecting their ability to pay rent.

I’d expect the sector to recover when inflation and interest rates retreat, but investors may have to be patient. This is a long-term income play, not a quickfire recovery stock. Also worth considering, with that in mind.

Income first, growth later?

Put £10,000 into each and the combined 6.63% yield would produce income of £1,326 a year. Reinvest those dividends and the income could compound over time, especially if boards continue to hike dividends.

Here are some more exciting opportunities to consider for a Stocks and Shares ISA today…

Should you invest £5,000 in M&g Plc right now?

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Harvey Jones owns shares in M&G.