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Investors are being urged to look abroad for income in the current environment by Legg Mason, as a number of UK companies cut dividends, while others suspend them altogether.

A number of UK-listed companies have slashed dividends following recent volatility in the markets and forecast reductions in profit for some companies.

A new survey from investment adviser and Legg Mason affiliate Global Currents found that just five of the top 100 yielding stocks in the world are located in the UK.

George Foley, portfolio manager of the Legg Mason Global Equity Income fund, said although UK companies had a reputation for paying attractive dividends, it was not the most attractive market.

Taiwan topped the table with 12 of the top 100 yielding stocks, while Australia and the US both had 11.

Mr Foley said: "In 2008, dividends on FTSE 100 stocks were cut by around 40 per cent, and further cuts are expected this year."

He said the collapse in the dividends paid by FTSE 100 companies was "alarming" for UK equity income investors, but said the outlook for other markets was more optimistic.

"Despite this, on a global scale, there are still a large number of companies paying an attractive dividend, so investors looking for an income need to expand their horizon.

"This is especially true for UK investors, as they are overexposed to UK companies."

Mr Foley said the location of the top 100 yielding stocks had changed over the year, taking into account a lot of the turmoil in developed markets.

In addition to Taiwan, other emerging economies have also appeared near the top of the highest-yielding stocks table, including Brazil and Turkey, with eight and five of the top 100 stocks, respectively.

Conversely, other European countries, including the Netherlands, France and Greece, were located at the bottom of the 11 countries surveyed, each with three of the top 100 high-yielding stocks.

But Mr Foley said Europe-based investors were beginning to recognise the benefits of a more globally diversified equity income portfolio.

He said the fundamentals of equity income investing were the same around the world, targeting well-managed companies with dividend growth and strong balance sheets.

It is, therefore, important for investors to choose a fund that diversifies over different sectors, currencies and countries, he said.