How much do you need in an ISA to double the 2026 State Pension?

Following the Autumn Budget, the UK State Pension is set to increase from Â£230.25 per week to Â£241.30 as of April 2026.

On an annual basis, that roughly translates into a retirement income of Â£12,548. But sadly, it’s not actually enough to live comfortably.

The good news is, by making smart investment decisions today, investors can get much closer to this goal. In fact, with a well-constructed ISA portfolio, it’s possible (if not guaranteed) to earn another Â£25,096 a year â double the 2025/26 State Pension â entirely tax-free.

Here’s how.

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.

The power of compounding

Following the 4% withdrawal rule, a portfolio needs to be worth approximately Â£627,400 to double next year’s State Pension.

Luckily, even with no savings at the age of 40, there’s still plenty of time to build up a chunky nest egg.

By making intelligent investment decisions, an ISA can go on to earn remarkable returns in the stock market. Even if that translates into 10% annualised gain (slightly ahead of the UK stock market average), investing Â£500 a month will grow into Â£630k in approximately 25 years. And thanks to compounding, those who are willing to wait a full three decades could have over Â£1.1m!

Of course, the question now becomes, what stocks are able to generate a 10% annualised return over the next 30 years?

Finding potential long-term winners

Maintaining double-digit returns over the long run sounds easy on paper. But in practice, it’s far more challenging. That’s because a lot can happen over the coming decades. And companies that have been outperforming today might not still be on top in the future.

Having said that, the list of potential winners can be narrowed down by looking exclusively at the companies with ample untapped growth opportunities. And one UK stock that I think could be in this category right now is Wise (LSE:WISE).

The cross-border payment specialist enables individuals and businesses to send and receive money abroad almost instantly at a fraction of the cost compared to traditional methods. And while it already has over 15 million active users, this might be the tip of the iceberg.

That’s because big banks have noticed the power of Wise’s payment technology. And rather than trying to fight it, they’re embracing it.

Morgan Stanley, Standard Chartered, and Raiffeisen Bank International are just a few of the leading financial institutions that now rely on Wise for their own international payments, making each of their customers an indirect customer of Wise. Don’t forget, Wise makes its money by charging small transaction fees.

Today, these institutionally sourced revenues make up just 5% of the group’s top line. But in the long-term management estimates, this could grow to over 50% – a massive growth opportunity.

What could go wrong?

Of course, Wise isn’t the only fintech aiming to disrupt the international payments space. This rising level of competition limits management’s ability to increase its fees, making the story all about volume.

Powering institutional money transfer certainly helps in that regard, but it nonetheless exposes Wise to shifting economic and geopolitical landscapes that can have a profound impact on international money transfers.

Nevertheless, with such enormous untapped growth potential, I’ve decided to take the risk and invest. And I think investors seeking to secure their retirement may want to think about doing the same.

The post How much do you need in an ISA to double the 2026 State Pension? appeared first on The Motley Fool UK.

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Zaven Boyrazian has positions in Wise Plc. The Motley Fool UK has recommended Standard Chartered Plc and Wise Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.