It’s a sad reality that the UK State Pension alone will not provide for a comfortable retirement. That’s why millions of people are looking to supplement their retirement income by investing in a Stocks and Shares ISA.
But how much would be needed to produce more than the UK State Pension which, for those with a full record of contributions, is currently £12,548 a year? Let’s see.
How do the numbers stack up?
The size of the investment pot required will vary with the level of dividends achieved. For example, a portfolio of dividend shares yielding 3% a year would require an ISA worth £418,267 to match the State Pension.
However, I think it’s possible to improve on this.
For example, there are 40 stocks on the FTSE 350 that are presently (31 May) yielding 6% or more.
One of these is Supermarket Income REIT (LSE:SUPR). It’s presently offering a return (no guarantees, of course) of 7.4%. It owns and operates a portfolio of large grocery stores in the UK and France, which it leases to blue-chip tenants under long-term contracts.
To generate £12,548 in dividends each year from this stock alone, £169,568 of the trust’s shares would be needed. Having said that, I’m not advocating owning just one share. I believe a diversified portfolio is important.
Link: https://uk.finance.yahoo.com/news/much-needed-stocks-shares-isa-070000256.html