{"id":307001,"date":"2025-12-09T13:35:06","date_gmt":"2025-12-09T13:35:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/307001\/"},"modified":"2025-12-09T13:35:06","modified_gmt":"2025-12-09T13:35:06","slug":"im-targeting-11363-a-year-in-retirement-from-20000-in-aviva-shares","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/307001\/","title":{"rendered":"I\u2019m targeting \u00a311,363 a year in retirement from \u00a320,000 in Aviva shares!"},"content":{"rendered":"

\"Businessman<\/p>\n

Image source: Getty Images<\/p>\n

Aviva (LSE: AV<\/a>) shares are down 8% from their 12 November one-year traded high of \u00a36.98. This has pushed the yield on 2024\u2019s 35.7p dividend up to 5.6%, compared to the current 3.1% FTSE 100 average.<\/p>\n

It is because yields move in the opposite direction to price if the annual dividend stays the same. But analysts forecast that dividend will be raised.<\/p>\n

So, how much could I make from my \u00a320,000 holding in the firm?<\/p>\n

Are these forecasts solid?<\/p>\n

Aviva has increased its dividends in each of the past three years \u2013 from 31p in 2022 to 35.7p in 2024. This generated average annual dividend yields of 7%, 7.7%, and 7.6%.<\/p>\n

The engine behind these gains for Aviva \u2013 as with any firm \u2014 has been earnings growth. And these jumped nearly 30% over the three years.<\/p>\n

A risk to them moving forward is any failure to integrate Direct Line optimally. Aviva expects \u00a3225m in cost synergies and \u00a3500m in capital synergies from the deal completed in July.<\/p>\n

However, analysts forecast that the investment and insurance giant\u2019s earnings will grow by a standout 18.4% a year to end-2027.<\/p>\n

Do recent results support the view?<\/p>\n

The firm\u2019s H1 2025 results<\/a> published on 14 August saw operating profit up 22% year on year to \u00a31.068bn.<\/p>\n

Its Wealth division\u2019s assets under management rose 6% to \u00a3209bn, extending its position as the number one UK player. Meanwhile, its General Insurance premiums jumped 7% to \u00a36.29bn, and its Health division\u2019s premiums rose 14% to \u00a31bn.<\/p>\n

Aviva now expects an operating profit of \u00a32bn by 2026.<\/p>\n

These positive threads carried through into its Q3 trading update of 13 November. General Insurance premiums rose 12% to \u00a310bn, and Wealth net flows increased 7.7%.<\/p>\n

The firm added that it is on track to surpass its 2025 \u00a32bn operating profit target early. As such, it has raised its 2025 target to \u2018around \u00a32.2bn\u2019.<\/p>\n

Positively as well, this includes around \u00a3150m from the integration of Direct Line.<\/p>\n

How much dividend income can I make?<\/p>\n

Based on its projected strong earnings growth analysts expect Aviva\u2019s dividends to rise to 41.5p next year and 44.7p in 2027.<\/p>\n

These would generate respective yields of 6.5% and 7% on the current share price. <\/p>\n

On that 7% yield, my \u00a320,000 holding in the firm would make me \u00a320,193 in dividends after 10 years. This is also provided that these payouts are reinvested back into the stock.<\/p>\n

This is a standard investment practice known as \u2018dividend compounding<\/a>\u2019 \u2013 similar to leaving savings to accrue in a bank account.<\/p>\n

After 30 years on the same basis, this would rise to \u00a3142,330, although I have to remember that 30 years is a long time and dividends can go down as well as up during such a period. This would give a total value to the holding of \u00a3162,330 (including my \u00a320,000 initial investment).<\/p>\n

And that would pay me \u00a311,363 a year in dividend income that I could use in my retirement.<\/p>\n

My investment view<\/p>\n

Given its strong earnings growth outlook and forecast rising dividend yield, I will be adding to my holding very soon.<\/p>\n

That said, other high-yielding stocks with excellent earnings growth prospects have also caught my eye recently.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Aviva (LSE: AV) shares are down 8% from their 12 November one-year traded high…\n","protected":false},"author":2,"featured_media":307002,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":{"0":"post-307001","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-personalfinance","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/307001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=307001"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/307001\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/307002"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=307001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=307001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=307001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}