The income available on short-term bank deposits continues to be minimal, with the interest rates of most major developed market central banks remaining near zero since the financial crisis.
Moreover, the widespread need for income during this protracted period of low interest rates has meant that traditional sources of income – such as many government bonds – no longer offer yields greater than central bank inflation targets.
Some investors may be considering buy-to-let property as one possible avenue to turn to in the search for an income that can beat inflation.
However, changes to the UK tax regime from 2017 could negatively impact the buy-to-let market, while house prices could also be vulnerable to rising interest rates.
There is also a limit as to how far rents can increase relative to incomes.
Arguably, the most attractive income opportunities are currently to be found in equities and high-yield bonds.
An investor in UK equities with an income focus, for example, could achieve a dividend yield of more than 4 per cent.
Additionally, investing in an income-focused global bond fund with a significant high-yield exposure could provide a yield in excess of 6 per cent.
Equity income undoubtedly comes with the risk of potential capital downside and volatility, but there is also potential capital growth on offer for investors who can handle the higher volatility.
For those that can afford to invest for the long term, equities currently provide a more attractive income than government bonds or a bank account, with the potential for long-term capital appreciation as well.
Investors are right to worry about the downside risks associated with equities, but by and large they are not expensive relative to history. However, actively avoiding those firms whose valuations have become stretched is important.
High-yield bonds have sold off recently, partly because of the negative impact of the fall in the price of oil on smaller energy companies. But there are bargains to be had for those firms that are able to survive with oil prices at the current levels.
Furthermore, non-energy, high-yield bonds have also sold off to a level that typically implies a greater chance of a recession than we anticipate.
If the global economy can avoid a recession during the next year, then the yield available on some high-yield bonds looks attractive.
But this is an asset class where fundamental company analysis is particularly important to ensure the firms that are likely to default are filtered out.
Given the higher risk associated with these types of investments, it definitely makes sense for investors to take a diversified approach to income investing.
This can either be by holding a combination of high-yield equity and bond funds, or by investing in a multi-asset income fund that can do the asset allocation for you.
Michael Bell is a global market strategist at JPMorgan Asset Management
4 - The number of consecutive months that the Investment Association Sterling High Yield Bond sector has recorded net retail outflows