However you would only have received this amount if you had reinvested the dividends, if you hadn’t that investment would be worth a mere £177. The study also showed that dividends on shares have risen, albeit erratically, almost every year since 1945.

Against this backdrop Garry White, chief investment communications officer at Charles Stanley, says the compounding effect of dividends means that high income shares are ideal for tax exempt vehicles such as ISAs.

In many previous years White says that investors for income producing shares in their ISA could look no further than the energy sector. Indeed in the past, between them, Royal Dutch Shell and BP paid about one fifth of the dividends in the FTSE 100.

However the recent collapse in global oil prices has led to some question marks over the cash flows and the sustainability of the dividend payments of these two giant companies. Meanwhile White notes the mining sector has also seen dividend payments slashed, while concerns surround the sustainability of the payments of other companies, with Barclays also recently cutting its dividend.

So where else can an investor seeking income look to gain yield? White gives three potential options worth considering, all of which are currently yielding 5% or more.

Bovis Homes – Current yield 5%

White says: “Mid-cap house builder Bovis invests mainly in the South but outside London, in greenfield sites and mostly in two-storey houses. Its recent full-year results were in line with City expectations and the company said it expected further growth in the current year. The dividend is well covered by earnings, at 2.4 times, and the most-recent dividend increase was an inflation-busting 14%. The overall backdrop for house building in the UK remains bullish, with demand continuing to outstrip supply.”

Admiral Group – Current yield 5.9%

White says: “Shares in car insurer Admiral Group hit an all-time high after the publication of its 2015 results in early March, boosted by rising motor rates. Management announced a special dividend payment of 9.8p a share and raised the ordinary payment by 16%. The company has been supporting results by releasing some of the reserves that had been set aside to cover future claims. However, premiums for motor insurance are now rising well ahead of claims inflation, which should mean the group will be able to reduce earnings dependency on its significant claims reserve cushion.”

AstraZeneca – Current yield 5%

White says: “Shares in AstraZeneca have recovered somewhat from a hit at the start of February, when it warned that revenue and earnings would drop this year due to the arrival of cheap generic rivals to Crestor, its top-selling cholesterol drug. However, management expect that the current year will represent a trough in earnings, which should return to growth in 2017. The dividend has been held for the last five years or so, once profits start to rise it is likely the dividend will be increased too. The group’s pipeline of new drugs looks promising, especially in relation to drugs that boost the body’s immune response to fight cancer, although there is mounting generic competition to its heartburn drug Nexium.”