diff --git a/dvc/utils/serialize/_common.py b/dvc/utils/serialize/_common.py
index 8e1a7b77e..71436523c 100644
--- a/dvc/utils/serialize/_common.py
+++ b/dvc/utils/serialize/_common.py
@@ -3,6 +3,7 @@ import os
 from contextlib import contextmanager
 from typing import TYPE_CHECKING, Any, Callable, ContextManager, Dict, Union
 
+from funcy import reraise
 from typing_extensions import Protocol
 
 from dvc.exceptions import DvcException
@@ -42,13 +43,24 @@ class ParseError(DvcException):
         from dvc.utils import relpath
 
         path = relpath(path)
+        self.path = path
         super().__init__(f"unable to read: '{path}', {message}")
 
 
+class EncodingError(ParseError):
+    """We could not read a file with the given encoding"""
+
+    def __init__(self, path: "AnyPath", encoding: str):
+        self.encoding = encoding
+        super().__init__(path, f"is not valid {encoding}")
+
+
 def _load_data(path: "AnyPath", parser: ParserFn, fs: "BaseFileSystem" = None):
     open_fn = fs.open if fs else open
-    with open_fn(path, encoding="utf-8") as fd:  # type: ignore
-        return parser(fd.read(), path)
+    encoding = "utf-8"
+    with open_fn(path, encoding=encoding) as fd:  # type: ignore
+        with reraise(UnicodeDecodeError, EncodingError(path, encoding)):
+            return parser(fd.read(), path)
 
 
 def _dump_data(path, data: Any, dumper: DumperFn, fs: "BaseFileSystem" = None):
diff --git a/tests/unit/utils/serialize/test_yaml.py b/tests/unit/utils/serialize/test_yaml.py
index 0240bdc55..cca5956c9 100644
--- a/tests/unit/utils/serialize/test_yaml.py
+++ b/tests/unit/utils/serialize/test_yaml.py
@@ -1,6 +1,6 @@
 import pytest
 
-from dvc.utils.serialize._yaml import YAMLError, parse_yaml
+from dvc.utils.serialize import EncodingError, YAMLError, load_yaml, parse_yaml
 
 
 def test_parse_yaml_duplicate_key_error():
@@ -12,3 +12,14 @@ def test_parse_yaml_duplicate_key_error():
     """
     with pytest.raises(YAMLError, match='found duplicate key "mykey"'):
         parse_yaml(text, "mypath")
+
+
+def test_parse_yaml_invalid_unicode(tmp_dir):
+    filename = "invalid_utf8.yaml"
+    tmp_dir.gen(filename, b"\x80some: stuff")
+
+    with pytest.raises(EncodingError) as excinfo:
+        load_yaml(tmp_dir / filename)
+
+    assert filename in excinfo.value.path
+    assert excinfo.value.encoding == "utf-8"