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Investing in an ISA is a brilliant way to top up your State Pension. All the share price growth and dividend income you generate will be free of tax. That\u2019s a real boon today, with the \u00a312,570 UK personal income tax allowance frozen all the way to 2031.<\/p>\n
The full new State Pension is now worth \u00a312,547.60. That\u2019s a whisker below the personal tax allowance today. Next year it will definitely exceed it. That means every penny of income from other sources will be taxable. But income from an ISA will remain tax-free, whether that\u2019s savings interest from a Cash ISA or dividends from a Stocks and Shares ISA<\/a>. You don\u2019t even have to mention ISA holdings on your tax return, which saves a lot of time and trouble.<\/p>\n Should you buy Lloyds Banking Group Plc shares today?<\/p>\n Before you decide, please take a moment to review this report first. Despite ongoing uncertainties from Trump’s tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.<\/p>\n That’s why this could be an ideal time to secure this valuable research \u2013 Mark’s analysts have scoured the markets to reveal 5 of his favourite long-term ‘Buys’. Please, don’t make any big decisions before seeing them.<\/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 Let\u2019s say somebody fancies effectively doubling their State Pension income, by using their ISA to generate a regular passive income in retirement.<\/p>\n Get HMRC off your back<\/p>\n How much investors need to generate that \u00a312k+ a year depends on the underlying yield on their ISA. Today, the average easy-access Cash ISA pays 2.73%, according to Moneyfacts. With that, they\u2019d need a savings pot of \u00a3459,619.<\/p>\n However, if they built a balanced portfolio of dividend-paying FTSE 100 shares<\/a> with an average 4% yield, they could target the same income with a \u00a3313,690 pot. And if they targeted shares yielding 5% on average, they could potentially do it with just \u00a3250,952.<\/p>\n Over the last 10 years, the average Stocks and Shares ISA has grown at 9.5% a year, against 4% for Cash ISAs. So investors could have a much bigger pot in retirement, and potentially be able to generate more income from it too.<\/p>\n Lloyds shares offer income and growth<\/p>\n