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Image source: Getty Images <\/p>\n Image source: Getty Images <\/p>\n
I have a Stocks and Shares ISA because I like the idea of earning money from doing very little. How? Well, lots of UK companies pay dividends and these are distributions of profit to shareholders.<\/p>\n
They can be thought of as a \u2018thank you\u2019 for investing.<\/p>\n
But let\u2019s assume someone wants to retire at 55 and live off dividends equivalent to half the UK\u2019s average (median) salary. Is it really possible to target an annual passive income of \u00a316,455, equivalent to \u00a31,370 a month? I think so.<\/p>\n
Let me explain.<\/p>\n
The biggest and best <\/p>\n
Some of the most reliable dividend payers can be found on the FTSE 100. But there are significant variations. The yield on the index as a whole is 3.1%. However, there are currently (7 June), 13 paying 5% or more. In fact, eight are returning at least 6%.<\/p>\n
With a portfolio of dividend shares yielding 5%, a Stocks and Shares ISA of \u00a3329,100 is going to be needed to produce an income of \u00a316,455 a year. At 6%, this drops to \u00a3274,250.<\/p>\n
But how could someone go about building an ISA worth this much? Let\u2019s see.<\/p>\n
Some numbers <\/p>\n
During the 20 years to April, the FTSE 100 generated an average annual return of 6.4%. This assumes dividends were reinvested buying more shares.<\/p>\n
An individual who invested \u00a35,000 a year and achieved a growth rate of 6.4%, would build a Stocks and Shares ISA of \u00a3308,863 after 25 years. To achieve our target annual income of \u00a316,455, a portfolio of dividend shares paying 5.3% would be needed.<\/p>\n
We\u2019ve seen there are plenty of FTSE 100 stocks offering attractive yields at the moment but there are many more elsewhere on the UK stock market. In fact, there are 127 on the FTSE All-Share index yielding 5.3%+.<\/p>\n
It pays to shop around <\/p>\n
One I have in my ISA is Supermarket Income REIT (LSE:SUPR). It owns a \u00a32.1bn portfolio of large grocery stores in the UK and France which it lets to blue-chip tenants on long-term leases.<\/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
It\u2019s currently offering a yield of 7.5%. Owning \u00a3308,863 of its shares would generate dividends of \u00a323,165 a year. However, as attractive as this might sound, it\u2019s important to hold a diversified portfolio of shares.<\/p>\n
That\u2019s because dividends are likely to fluctuate in line with earnings. This potential volatility means payouts never come with any guarantees. Indeed, Supermarket Income\u2019s profit could come under threat if interest rates remain higher for longer \u2013 it had \u00a3980m of borrowings at 31 March \u2013 and if it struggled to lease one or more of its properties.<\/p>\n
A good track record <\/p>\n
However, since listing in July 2017, Supermarket Income REIT has increased its dividend every year:<\/p>\n
Also, it\u2019s never had a bad debt and it currently enjoys a 100% occupancy rate. Crucially, I believe grocery stores are here to stay. Whether people shop in-store or online, large supermarkets remain an essential part of the sector\u2019s business model.<\/p>\n
For these reasons, I believe Supermarket Income REIT\u2019s an excellent dividend share to consider for those wanting to boost their passive income.<\/p>\n
Should you invest \u00a35,000 in Supermarket Income REIT Plc right now? <\/p>\n
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.<\/p>\n
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Supermarket Income REIT Plc made the list?<\/p>\n
See The Six Stocks<\/p>\n
James Beard owns shares in Supermarket Income REIT.<\/p>\n
The post How much is needed in a Stocks and Shares ISA to target a \u00a31,370 monthly passive income?<\/a> appeared first on The Twelfth Magpie<\/a>.<\/p>\n More reading<\/p>\n Motley Fool UK 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images I have a Stocks and Shares ISA because I like the idea of earning…\n","protected":false},"author":2,"featured_media":626576,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,2016,59,1088,1087,49128,56,54,55],"class_list":["post-626575","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ftse-100","tag-gb","tag-passive-income","tag-stocks-and-shares-isa","tag-supermarket","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/626575","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=626575"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/626575\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/626576"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=626575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=626575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=626575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}