How much do you need in a Stocks and Shares ISA to aim for £766.60 of weekly passive income?
The start of a new year is often a time when investors consider how their Stocks and Shares ISAs have performed over the previous 12 months. And those who like to invest in dividend shares are probably reviewing how much passive income their portfolios generated.
Personally, Iâm using an ISA and a SIPP (Self-Invested Personal Pension) to build up a nest egg for my retirement. But how much would be needed in a Stocks and Shares ISA to match average UK earnings? Letâs take a closer look.
Crunching the numbers
According to the Office for National Statistics, £766.60 is the target. This is the median weekly earnings (before tax) of the countryâs full-time employees.
To generate the same level of income from an ISA full of dividend shares yielding 6%, an individual would need to have a portfolio worth £664,387.
This is a large sum. But with a disciplined approach over a lifetime of investing, I reckon itâs possible to achieve something similar. The table below shows how much can be generated over 30 years depending on the monthly contribution and return achieved.
| Annual return/monthly investment | £100 | £200 | £300 | £400 | £500 |
|---|---|---|---|---|---|
| 4% | £68,751 | £137,502 | £206,254 | £275,005 | £343,756 |
| 5% | £81,869 | £163,739 | £245,609 | £327,479 | £409,348 |
| 6% | £97,925 | £195,851 | £293,776 | £391,702 | £489,628 |
| 7% | £117,606 | £235,212 | £352,819 | £470,425 | £588,032 |
| 8% | £141,761 | £283,522 | £425,283 | £567,045 | £708,806 |
However, one of the advantages of using a Stocks and Shares ISA, is that all income and capital growth can be enjoyed free of tax.
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.
So, is it possible to have a portfolio of shares paying dividends of 6%? I think so.
Close to home
One of the reasons why I like investing in UK shares is that many of them have impressive track records of returning cash to shareholders. Of course, there are no guarantees but a companyâs history of payouts can be a useful guide.
For example, for 43 years, Scottish Mortgage Investment Trust has grown its dividend per share in cash terms. However, thereâs another FTSE 100 company that’s done better. Halmaâs 2025 financial year marked its 46th consecutive annual increase. What’s more, each of these has been worth 5% or more.
But neither of these stocks are yielding 6%. To achieve a return like this, itâs necessary to consider the top six on the index of the UKâs largest 100 companies. For comparison, the FTSE 250 currently (12 January) has 34 stocks offering a yield of 6%.
An option
One FTSE 250 dividend share that I thinkâs worth considering â indeed, one that I hold â is Harbour Energy (LSE:HBR). Since I first invested in 2022, the oil and gas producer has increased its dividend by around 13% but its share price has fallen by more than 40%. This means its current yield is 10.3%.
Not everyone likes the idea of investing in an energy company, which means thereâs a smaller pool of investors out there. And Harbour Energyâs subject to a windfall tax of 78% on its UK profit.
However, as a result of some strategic acquisitions, it now produces more outside of the UKâs waters than it did previously at a lower unit cost. And despite the tax rate it faces here, the companyâs expected to have generated $1bn of free cash flow in 2025, of which it plans to pay $455m to shareholders. Also, it has 19 years of reserves.
Harbour Energy’s just one exciting UK share that I hold.
The post How much do you need in a Stocks and Shares ISA to aim for £766.60 of weekly passive income? appeared first on The Motley Fool UK.
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More reading
- Iâm targeting £42,949 in dividend income for my retirement from £20,000 in this 10.2%-yielding FTSE 250 gem!
- Could the 10% yield on this FTSE 250 dividend share go higher still in 2026?
- How much do you need in an ISA to target a £3,658 monthly passive income?
- Could these 2 stocks in my SIPP really increase in value by 24% in 2026?
James Beard has positions in Harbour Energy Plc. The Motley Fool UK has recommended Halma 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.
