Latest news with #StocksAndSharesISA
Yahoo
4 days ago
- Business
- Yahoo
Just turned 50? At retirement, investing £500 a month in a Stocks and Shares ISA could be worth…
Building wealth in a Stocks and Shares ISA is a proven strategy for securing a more comfortable retirement. And even those starting late at the age of 50, there's still plenty of time to leverage the tax advantages and grow a sizable nest egg, even with just £500 a month. 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. Exploring the possibilities In 2025, the average retirement age is around 65. And assuming an investor intends to start enjoying retirement at this age, a 50-year-old today has 15 years to financially prepare. When it comes to UK shares, the average long-term return investors have come to expect is around 6-8% a year for the more popular large-caps found in the FTSE 100. And investing at these rates with £500 a month for 15 years is sufficient to build a nest egg worth anywhere between £145,410 and £173,000. That's almost double the total £90,000 in deposits that will have been made during the period. While this sum of money is certainly nothing to scoff at, it's hardly sufficient to live a luxurious lifestyle. After all, the estimated retirement income needed to support just a moderate lifestyle is £31,700 a year in 2025. And due to inflation, that number's likely going to be higher come 2040. Boosting performance One of the easiest ways to ensure a larger nest egg is to simply contribute more. Doubling the monthly contributions to £1,000 is enough to boost a Stocks and Shares ISA to as high as £346,000. However, what if investors could also earn more than an 8% annualised return? By adopting a stock-picking strategy, that might be possible. Investing exclusively in the best and brightest of businesses opens the door to amplified portfolio returns. And that's something the shareholders of Cranswick (LSE:CWK) have experienced first-hand. Through a combination of market leadership alongside consistent and strong financial execution, the food production enterprise has emerged as one of the best-performing companies in its industry. And in just the last 15 years, the stock's gone on to deliver more than a 500% total return, averaging 12.8% on an annualised basis. At this rate, a £500 monthly investment would have grown to £270,000, while a £1,000 monthly investment would now be worth £540,000. Needless to say, these are substantial differences compared to the results achieved by index funds. Taking a step back In 2025, Cranswick continues to be a compelling investment opportunity. Its latest trading update included a welcome upgrade to its medium-term targets with management now targeting underlying operating margins of 7.5%, up from 6%. And as the firm continues to become more cash generative, Cranswick's still slowly expanding its market share through smart capital allocation. With that in mind, it isn't surprising to see overwhelming positive sentiment coming from institutional investors. However, while opinions are bullish, Cranswick still has its weak spots. The firm operates in a highly regulated market with food safety requirements constantly in flux. Cranswick's also highly dependent on UK retail customers, creating concentration risk. And it's recent expansion into pet food through its 2022 acquisition of Grove Pet Foods, there are also strategic execution risks to consider. Nevertheless, given its impressive track record, investors building retirement wealth in a Stocks and Shares ISA may want to take a closer look. The post Just turned 50? At retirement, investing £500 a month in a Stocks and Shares ISA could be worth… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. Motley Fool UK 2025
Yahoo
20-07-2025
- Business
- Yahoo
If a 30-year-old puts £500 a month into a Stocks and Shares ISA, they could have £2.3m at retirement!
Investing in a Stocks and Shares ISA is arguably the most effective way to build wealth in Britain. And starting early allows young investors to maximise the rewards. In fact, a 30-year-old investor planning to retire at the age of 67 could become a multi-millionaire with just £500 a month. Here's how. Retiring with £2.3m in the bank The average return generated from the stock market varies depending on what investments are made. But here in the UK, that return's typically sat between 8% for large-caps and 10% for small-caps annually over the last 30 years. For someone who's just turned 30 and has no savings, securing that upper rate of return with a £500 monthly investment will grow to £2.3m when compounded over 37 years. And for those earning enough to maximise their annual ISA allowance (£1,667 a month), their retirement wealth could be a staggering £7.8m! And unlike when using a Self-Invested Personal Pension (SIPP), that money can be withdrawn all at once with zero taxes to pay. Of course, in practice, consistently earning a 10% annual return isn't easy. In fact, even when relying on an index fund, some years will be far better than others. And similarly, over a 37-year time span, chances are an investment portfolio will go through multiple corrections and crashes that could leave investors with less money than expected come retirement. Nevertheless, even earning half of this amount still leaves someone with over £1m in the bank – more than enough to live comfortably by today's standard. 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. Earning a 10% return with small-caps Investing in small-cap stocks opens the door to superior returns. But the small size of these businesses can also make them far more volatile and sensitive to external disruptions. In other words, aiming for a 10% return with this class of equities is a riskier endeavour compared to investing in boring FTSE 100 companies. Nevertheless, there is a wide range of promising opportunities to capitalise on right now. One stock that might have the potential to outperform in the long run is dotDigital Group (LSE:DOTD). The digital marketing platform allows small- and medium-sized businesses to automate their marketing campaigns and use artificial intelligence (AI) predictive analytics to maximise engagement. It's a tool that's proving particularly popular among e-commerce stores, resulting in the average revenue per customer quadrupling over the last decade. Unfavourable product mix with SMS contracts has resulted in margin compression. However, with management refocusing the mix toward maximising profitability, margins are expected to start recovering in 2025. And with the fundamentals now catching up to its previously lofty valuation, the stock's recent flat performance may soon improve. What could go wrong? Seeing new and existing customers spend more money each year is an encouraging sign. As is the group's impressive free cash flow generation, something that's rare for a small-cap stock. However, that doesn't make it a guaranteed winner. Despite my bullish stance, there are still some notable risks and challenges to consider. The digital advertising market is highly competitive with a lot of rivals sitting on big cash war chests. And so far, the group's progress regarding its expansion into international markets like Japan have been underwhelming. Nevertheless, if dotDigital can overcome these hurdles, the investment returns could be a further-research candidate as it may prove helpful in growing a Stocks and Shares ISA towards millionaire territory. The post If a 30-year-old puts £500 a month into a Stocks and Shares ISA, they could have £2.3m at retirement! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has positions in Dotdigital Group Plc. The Motley Fool UK has recommended Dotdigital Group 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. Motley Fool UK 2025
Yahoo
13-07-2025
- Business
- Yahoo
How an investor could target £2,000 of monthly passive income by starting to invest in 2025
For many aspiring investors, the prospect of earning a steady £2,000 a month in passive income is the goal. It sounds great, but the challenge for many is often just getting started. Starting investing can feel overwhelming, but breaking the process down into simple, manageable steps makes it much more approachable. The first step involves selecting a brokerage platform that offers a Stocks and Shares ISA, such as Hargreaves Lansdown, or AJ Bell. Opening an ISA's crucial because it allows investments to grow free from capital gains and dividend taxes, maximising the potential returns over time. 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. Once the ISA's set up, establishing a regular investment plan is the next logical move. This typically involves arranging a monthly direct debit to invest a fixed amount. At first, this may involve investing straight into a fund or trust to gain instant diversification. This can be done through the brokerage. Stock picking can come later. A popular choice for many investors is an S&P 500 ETF. For example, the Vanguard S&P 500 ETF has delivered an average annual return of around 12.5% over the past decade. By investing a consistent sum each month, the strategy known as pound-cost averaging comes into play. This approach means more units are purchased when prices are low and fewer when prices are high, smoothing out the impact of market fluctuations and reducing the risks associated with trying to time the market. The real power behind this method lies in compounding. Returns generated by the investments — whether through dividends, interest, or capital gains — are reinvested, creating a snowball effect. This is where earnings generate further earnings. Over time, this compounding can significantly amplify the value of the portfolio. To illustrate, a monthly investment of £500 into an S&P 500 ETF, assuming a 12.5% annual return, could grow to approximately £480,000 in just under 20 years. However, 12.5% as an ambitious goal. Investing in a diversified portfolio of mature UK dividend-paying stocks with an average annual growth rate of 7% would reach the same target in around 27 years. And a £480,000 portfolio could generate £2,000 a month, assuming a 5% yield. If an investor is starting from scratch, I think they should first seek the diversification I mentioned above. One investment could be The Monks Investment Trust (LSE:MNKS). This investment trust is designed as a core global growth holding, offering exposure to a diversified portfolio of companies across developed and emerging markets. Managed by Baillie Gifford, Monks prioritises long-term capital growth over income, with the current yield standing at just 0.17%. The portfolio's structured into rapid growth, growth stalwarts, and cyclical growth buckets, and traditionally has a bias towards small- and mid-cap companies that are often overlooked by the broader market. This differentiated approach can provide access to under-appreciated growth opportunities. However, this strategy comes with risks. Monks has lagged its benchmark in recent years, particularly when market returns have been concentrated in large-cap technology stocks. Moreover, the trust's focus on growth means it can underperform when growth stocks fall out of favour. However, I'm backing it to outperform over the long run. And this was why I made it one of my first investments in my daughter's Self-Invested Personal Pension (SIPP). It definitely deserves broader consideration. The post How an investor could target £2,000 of monthly passive income by starting to invest in 2025 appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has positions in The Monks Investment Trust plc. The Motley Fool UK has recommended Aj Bell 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. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
12-07-2025
- Business
- Yahoo
How to take an empty ISA and transform it into a potential £50,000 second income
Investing in dividend stocks is a powerful and proven way to start earning a chunky second income. And doing so inside of a Stocks and Shares ISA only amplifies the benefits with no taxes to worry about, even if dividends end up reaching as high as £50,000! 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. On average, UK shares offer a dividend yield of around 4%. However, by being a bit selective, it's possible to boost that yield a little higher towards 5% without needing to take on excessive levels of risk. And at this rate, a £50,000 second income from dividends would need a £1,000,000 portfolio. Sadly, most investors don't have a seven-figure nest egg just sitting in the bank. Fortunately, when working on a long-term time horizon, reaching this impressive milestone is far more achievable than many would believe. Putting aside £500 each month and reinvesting any dividends received creates a steady stream of capital to leverage the snowball effect of compounding. Let's assume that on top of the 5% dividend yield, a portfolio also generates an extra 4% annual capital gain, in line with the market average. This brings the total gain to 9% a year. And under these conditions, the journey to millionaire status could be completed in just over 30 years when starting from scratch. Is that a guaranteed timeline? Of course not. The stock market does have a tendency to go through crashes and corrections every once in a while. And a poorly-timed downturn could leave investors waiting longer than expected. But even if everything does go smoothly, it's worth remembering that inflation will chip away at the spending power of £50,000. Nevertheless, an early retirement could still be possible for those who begin their wealth-building journey sooner rather than later. With UK shares performing strongly in 2025, the list of high-yielding opportunities across the FTSE 350 has shrunk compared to a few years ago. Yet there are still plenty of opportunities available to capitalise on. And one that I've got my eye on right now is PayPoint (LSE:PAY). The yield's slightly shy of the target 5%. But thanks to the highly cash-generative nature of this enterprise, shareholder payouts have been getting consistently hiked for the last four years. In other words, a 5% yield could be just around the corner. The business provides payment processing solutions to over 67,000 small and independent retailers across the UK, as well as operating the Collect+ parcel network that many e-commerce stores leverage to keep last-mile delivery costs low. And with tools, features, and online shopping steadily driving demand, the company has seen its growth quietly expand over the last five years. And if analyst projections prove accurate, that trend's expected to continue. Of course, there are risks to consider. Aggressive internal investments and share buyback schemes have pushed the group's net debt up significantly. At the same time, with its terminals already deployed across the country, there's the risk of market saturation to consider that could undercut growth potential. Management's been steadily diversifying its business to unlock fresh opportunities, funded by its existing cash-generative operations. But of course, execution risk remains. Nevertheless, PayPoint looks like a potentially interesting opportunity. And for investors seeking to earn a chunky second income, it might be a stock worthy of a closer look. The post How to take an empty ISA and transform it into a potential £50,000 second income appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. Motley Fool UK 2025 Sign in to access your portfolio
Finextra
08-07-2025
- Business
- Finextra
Revolut launches stocks and shares ISAs and ETF investment options
Revolut has launched Stocks and Shares ISAs and UK-listed Exchange-Traded Funds (ETFs) as it expands investment options for customers in the UK. 0 With Revolut's new Stocks and Shares ISA, transfers from existing providers will be available to customers in the coming weeks, with interest on uninvested cash within customers ISA pots to follow after. Furthermore, alongside the ability to invest in homegrown UK and popular European and US companies, Revolut now offers access to hundreds of popular ETFs, including Vanguard and Blackrock, from as little as £1. Commenting on the launch, Yana Skrebenkova, CEO of Wealth and Trading UK, says: 'We believe that building wealth shouldn't be a privilege reserved for the few. That's why we're breaking down the barriers to give our UK customers access to more low-cost investment tools alongside their day-to-day spending, without navigating multiple platforms. 'Our UK customers can grow their money in a tax-efficient investment Stocks and Shares ISA, put their money back into homegrown companies, and diversify their portfolios through ETFs, European and US stocks, giving them far more choice to hedge against market volatility and supercharge their long-term savings.'
