Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » With a £20K ISA, an investor could earn £1,500 a year from FTSE 100 shares
    News

    With a £20K ISA, an investor could earn £1,500 a year from FTSE 100 shares

    userBy userApril 2, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Getty Images

    One of the things I like about a Stocks and Shares ISA is that it allows me to build up passive income streams that hopefully can keep flowing year after year. That can be while sticking to proven blue-chip FTSE 100 businesses.

    As an example of this approach, here is how an investor with £20K could target a £1,500 annual passive income stream.

    Getting the right ISA

    The first move would be to select the optimal Stocks and Shares ISA.

    There are lots of options available on the market and each investor has their own particular needs, so it makes sense to pay attention to what is on offer.

    Even small-seeming fees and costs can add up – and eat into passive income!

    Building an income stream

    To generate £1,500 each year in passive income from a £20K ISA would require a 7.5% yield. That is over double the average FTSE 100 yield at the moment.

    One approach would be to invest at a lower yield and compound the dividends for a few years until the target was achieved.

    But in the current market, I do not think it is necessary for an investor to wait like that. I reckon they could realistically aim to achieve a 7.5% yield from the start, buying a diversified portfolio of blue-chip shares.

    As that is an average, if some shares yield less it would be fine, as long as the average was balanced out by other higher-yielding ones.

    Three shares to consider

    As an example, here are three FTSE 100 shares I think investors could consider as part of such an approach.

    Legal & General is a financial services powerhouse with a long history – and hopefully a long future ahead of it too.

    It benefits from a strong brand, resilient customer demand and large existing client base. The sale of a big US business does bring a risk of lower earnings in future, though in the short term the cash proceeds should help support the beefy dividend and share buyback programme.

    Legal & General yields 8.8%.

    Secondly, M&G is another FTSE 100 financial services name with a chunky yield.

    It yields 10.3% and the asset manager recently increased the annual payout per share.

    It also has a strong brand and customer base in the millions, though one risk is that clients pulling out more funds than they put in will hurt profits.

    A third share to consider is insurer Aviva (LSE: AV).

    Its 6.4% yield is below the target I mentioned above, though as I explained, it could be part of a portfolio that still achieves that target overall.

    Insurance benefits from large, resilient demand. Aviva is a massive force in the UK insurance sector and is set to grow further with its acquisition of rival Direct Line.

    That risks distracting management attention, not least because Direct Line’s business has been struggling in recent years.

    But it should offer Aviva even greater economies of scale. Meanwhile, Aviva has a large customer base, proven business model and clearly defined strategy. I see those as assets.

    The FTSE 100 firm did cut its dividend in 2020 but since then the payout per share has been growing handily.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleCould buying these growth stocks today be like buying Amazon or Apple 10 years ago?
    Next Article Is the Tesco share price about to turn?
    user
    • Website

    Related Posts

    6.6% yield? Here’s the dividend forecast for BP shares to 2027

    May 21, 2025

    3 super small-caps with 6%+ yields to consider for passive income

    May 21, 2025

    This £10k ISA produces £827 of passive income each year

    May 21, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d