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Image source: Getty Images<\/p>\n
Following the Autumn Budget, the UK State Pension is set to increase from \u00a3230.25 per week to \u00a3241.30 as of April 2026.<\/p>\n
On an annual basis, that roughly translates into a retirement income of \u00a312,548. But sadly, it\u2019s not actually enough to live comfortably.<\/p>\n
The good news is, by making smart investment decisions today, investors can get much closer to this goal. In fact, with a well-constructed ISA portfolio, it\u2019s possible (if not guaranteed) to earn another \u00a325,096 a year \u2013 double the 2025\/26 State Pension \u2013 entirely tax-free.<\/p>\n
Here\u2019s how.<\/p>\n
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.<\/p>\n
The power of compounding<\/p>\n
Following the 4% withdrawal rule, a portfolio needs to be worth approximately \u00a3627,400 to double next year\u2019s State Pension.<\/p>\n
Luckily, even with no savings at the age of 40, there\u2019s still plenty of time to build up a chunky nest egg.<\/p>\n
By making intelligent investment decisions, an ISA can go on to earn remarkable returns in the stock market. Even if that translates into 10% annualised gain (slightly ahead of the UK stock market average), investing \u00a3500 a month will grow into \u00a3630k in approximately 25 years. And thanks to compounding, those who are willing to wait a full three decades could have over \u00a31.1m!<\/p>\n
Of course, the question now becomes, what stocks are able to generate a 10% annualised return over the next 30 years?<\/p>\n
Finding potential long-term winners<\/p>\n
Maintaining double-digit returns over the long run sounds easy on paper. But in practice, it\u2019s far more challenging. That\u2019s because a lot can happen over the coming decades. And companies that have been outperforming today might not still be on top in the future.<\/p>\n
Having said that, the list of potential winners can be narrowed down by looking exclusively at the companies with ample untapped growth opportunities<\/a>. And one UK stock that I think could be in this category right now is Wise (LSE:WISE<\/a>).<\/p>\n The cross-border payment specialist enables individuals and businesses to send and receive money abroad almost instantly at a fraction of the cost compared to traditional methods. And while it already has over 15 million active users, this might be the tip of the iceberg.<\/p>\n That\u2019s because big banks have noticed the power of Wise\u2019s payment technology. And rather than trying to fight it, they\u2019re embracing it.<\/p>\n