The CF Woodford Income Focus fund will aim to pay a dividend of 5p per share in its first calendar year in 2018.

The new fund will have the scope to invest across geographic region and will not invest in unquoted companies, differentiating it from Woodford’s hugely popular Equity Income product.

Woodford expects the fund to yield at least 20% more than the income delivered by the FTSE All Share index over a rolling five-year period.

Woodford is one of Britain’s best known fund managers. His existing equity product dominated the fund bestseller charts last year.

He set up Woodford Investment Management in 2014 after quitting Invesco Perpetual.

A spokesperson for Woodford said: “Woodford Investment Management confirms that it intends to launch the CF Woodford Income Focus Fund in March 2017, with a fixed-offer period. The dates will be confirmed in due course.”

Mark Dampier, head of investment research at Hargreaves Lansdown, said: “The new fund differs from Woodford Equity Income by focusing on producing a high income. With a million more people reaching age 65 by 2020 the need for income with interest rates so low has never been greater.”

Ryan Hughes, head of fund selection at broker AJ Bell, said: “By specifically excluding unquoted stocks, the focus on income generation is clear while the flexibility to look overseas will also offer a much wider opportunity set should the UK economy falter in the face of potential headwinds from the forthcoming Brexit.”