Here are 7 FTSE 250 stocks to target an ISA income

The FTSE 100 remains the primary destination for ISA investors seeking a large and sustained passive income. The UK’s premier share index is jam-packed with market-leaders in mature industries with robust balance sheets.

It’s the perfect recipe for large and growing dividends over time. But could investors be losing out on some juicy dividend income by focusing too much on Footsie-listed companies?

I think so. So let me talk about seven incredible FTSE 250 dividend shares I think could supercharge returns in a Stocks and Shares ISA.

FTSE 100 vs FTSE 250

The FTSE 100 and FTSE 250 have both enjoyed solid gains in recent years. However, the Footsie’s 52% increase since late 2020 smashes the 9% gain its less prestigious cousin has reported.

But this has had a serious downside for blue-chip investors, as dividend yields move in the opposite direction to share prices. Right now, the average forward dividend yield on FTSE 100 shares is 3%.

That’s below the 3.4% average for FTSE 250 stocks. And it’s an incredible turnaround given the FTSE 100 is considered the go-to index for dividend income, and the FTSE 250 for growth shares.

As you can see, investing in a FTSE 250 tracker fund could be more lucrative for passive income today. But as an investor myself, I wouldn’t be content with the yield the broader index currently offers.

Why would I be, when there are so many high-yield heroes for me to choose from right now?

6% dividend yield

Take a look at the following portfolio of quality dividend shares. The average dividend yield across this collection is 6%.

That’s substantially higher than the index average, and double what a FTSE tracker fund might deliver:

Dividend share	2026 dividend yield
ITV	6.1%
TBC Bank	6.6%
Empiric Student Property	5.6%
Tritax Big Box REIT (LSE:BBOX)	5.7%
Greggs	4.2%
HICL Infrastructure	7.5%
Man Group	6.2%

Okay, this mini-portfolio holds fewer companies than a FTSE 250 tracker fund. But I’m still confident it will deliver a healthy passive income in 2026 alone, given its diversification across sectors and focus on financially robust companies.

Take Tritax Big Box, which has raised dividends in nine of the last 10 years. The only exception was in 2020 when the firm cut payouts in response to pandemic uncertainty.

The company’s real estate investment trust (REIT) classification provides excellent dividend visibility for investors. Sector rules mean 90% or more of its annual rental profits must be distributed to shareholders each year.

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.

This doesn’t guarantee a large or growing dividend on its own. After all, earnings can sink if economic conditions worsen, hitting occupancy levels and rent collection.

But Tritax Big Box’s enormous portfolio significantly reduces this risk. It has more than 150 properties on its books and hundreds of tenants. Its customers — many of which are blue-chip companies like Amazon, Tesco, and Unilever — are also locked into long, multi-year contracts.

Bottom line

The FTSE 100 remains a great place to find dividend stocks. Indeed, I hold several Footsie-listed income shares in my own portfolio. But as you can see, adding other quality stocks like the ones mentioned above can help in the pursuit of passive income.

The post Here are 7 FTSE 250 stocks to target an ISA income appeared first on The Motley Fool UK.

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Royston Wild has positions in Greggs Plc. The Motley Fool UK has recommended Amazon, Greggs Plc, ITV, Tesco Plc, Tritax Big Box REIT Plc, and Unilever. 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.