For me, leveraging a Stocks and Shares ISA and following a disciplined investment strategy is the very best way to try and achieve a £5,000 monthly passive income. The beauty of an ISA lies in its tax-free benefits, allowing investments to grow unhindered by capital gains or dividend taxes.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.
Stocks and Shares ISAs outperform savings accountsMost Britons still rely on savings accounts, but with annualised returns typically below 3%, their money isn’t growing fast enough. By contrast, investing in stock markets has historically delivered significantly higher returns.For instance, the FTSE 100 has averaged an annual return of 6.
4% over the past 20 years, while the S&P 500 has averaged 10.5% since its inception. Even more impressively, the Nasdaq 100 has posted an average return of 19% over the last decade.
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To generate £5,000 monthly, or £60,000 annually, investors would typically need at least £1.2m in their ISA. This assumes a 5% withdrawal rate.
And this can be achieved by investing in dividend-paying stocks or bonds within a Stocks and Shares ISA. A.
