{"id":22435,"date":"2026-04-26T12:20:36","date_gmt":"2026-04-26T12:20:36","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/22435\/"},"modified":"2026-04-26T12:20:36","modified_gmt":"2026-04-26T12:20:36","slug":"how-big-would-an-isa-need-to-be-to-double-the-state-pension-and-target-a-25096-income","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/22435\/","title":{"rendered":"How big would an ISA need to be to double the State Pension and target a \u00a325,096 income?"},"content":{"rendered":"

\"Happy Image source: Getty Images <\/p>\n

Those with a full record of National Insurance contributions can currently receive a State Pension of \u00a312,548 a year.<\/p>\n

But according to experts, a single person needs an income of \u00a313,400 to provide for a basic retirement. For those seeking a moderate standard of living in old age, \u00a331,700 is required. Worryingly, this is \u00a319,152 more than the State Pension.<\/p>\n

However, by using a Stocks and Shares ISA, I reckon it\u2019s possible to make up this shortfall (and more). Let me explain.<\/p>\n

An ISA worth \u00a3209,133, paying dividends at 6%, would generate \u00a312,548 a year. Add this to the full State Pension and it could provide a retirement income of \u00a325,096.<\/p>\n

To generate \u00a319,152 \u2013 which would give \u00a331,700 when combined with the maximum State Pension \u2014 a retirement pot of \u00a3319,200 is needed.<\/p>\n

How might this be achieved? By way of example, investing \u00a3266 a month for 25 years, growing at 7% per annum, could build an ISA of \u00a3209,133. Increasing this to \u00a3406 would produce an ISA valued at \u00a3319,200.<\/p>\n

But is it really possible to earn 6% in dividends each year? I think so.<\/p>\n

There are presently (26 April) 89 UK stocks offering a yield of 6% or more. Obviously, dividends cannot be guaranteed. And in some cases a high yield could be a warning sign that it\u2019s unsustainable.<\/p>\n

However, companies with low debt levels, limited capital expenditure requirements, and strong cash flows are well placed to return a significant proportion of their profit to shareholders.<\/p>\n

And if they\u2019re in a stable industry where rapid growth is unlikely, their share prices often trade at relatively low levels and their yields remain above average.<\/p>\n

One company that meets this description is James Halstead (LSE:JHD). As a global manufacturer and supplier of flooring to commercial and residential customers, it tends to fly under the radar. Yet its current dividend yield of 6.4% is worthy of a few headlines.<\/p>\n

Apply this to a \u00a3209,133 ISA and it would produce a healthy income of \u00a313,385 a year.<\/p>\n

Impressively, after first returning cash to shareholders in 1979, it\u2019s increased its payout every year since.<\/p>\n

However, it\u2019s struggled since the pandemic. Both the group\u2019s costs and the spending power of its customers were affected by post-Covid price rises. Of concern, the current Middle East conflict raises the spectre of inflation picking up again.<\/p>\n

And with a market-cap of \u00a3570m it\u2019s a relatively small company, which makes it vulnerable to a prolonged downturn.<\/p>\n

Financial year<\/p>\n

Dividend (pence)<\/p>\n

Share price (pence)<\/p>\n

Yield (%)<\/p>\n

30.6.25<\/p>\n

8.80<\/p>\n

160<\/p>\n

5.5<\/p>\n

30.6.24<\/p>\n

8.50<\/p>\n

183<\/p>\n

4.6<\/p>\n

30.6.23<\/p>\n

8.00<\/p>\n

211<\/p>\n

3.8<\/p>\n

30.6.22<\/p>\n

7.75<\/p>\n

203<\/p>\n

3.8<\/p>\n

30.6.21<\/p>\n

7.63<\/p>\n

260<\/p>\n

2.9<\/p>\n

30.6.20<\/p>\n

7.13<\/p>\n

259<\/p>\n

2.8<\/p>\n

30.6.19<\/p>\n

7.00<\/p>\n

257<\/p>\n

2.7<\/p>\n

30.6.18<\/p>\n

6.75<\/p>\n

201<\/p>\n

3.4<\/p>\n

30.6.17<\/p>\n

6.50<\/p>\n

234<\/p>\n

2.8<\/p>\n

30.6.16<\/p>\n

6.00<\/p>\n

205<\/p>\n

2.9<\/p>\n

But its recent woes mean its share price has drifted lower and \u2013 relative to earnings \u2013 become much cheaper.<\/p>\n

For the year ended 30 June 2025, the group reported earnings per share of 9.7p, giving a historic price-to-earnings (P\/E) ratio of 14.1. This is comfortably below its five-year average (median) of 19.5.<\/p>\n

In light of this, I think now could be a good time to consider taking a position. Despite its recent challenges, the group has no debt and continues to earn a healthy margin. It also has a global customer base. And then there\u2019s its impressive dividend history.<\/p>\n

I think the flooring market and James Halstead\u2019s share price will pick up soon. If I\u2019m right, the stock\u2019s attractive yield might not be on offer for much longer.<\/p>\n

The post How big would an ISA need to be to double the State Pension and target a \u00a325,096 income?<\/a> appeared first on The Motley Fool UK<\/a>.<\/p>\n

More reading<\/p>\n

James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended London Stock Exchange 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.<\/a><\/p>\n

Motley Fool UK 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Those with a full record of National Insurance contributions can currently receive a State…\n","protected":false},"author":2,"featured_media":22436,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[9665,3452,10164,1121,5719,5,6],"class_list":{"0":"post-22435","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"tag-james-halstead","9":"tag-retirement-income","10":"tag-share-prices","11":"tag-state-pension","12":"tag-stocks-and-shares-isa","13":"tag-uk","14":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116470980445842972","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/22435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=22435"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/22435\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/22436"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=22435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=22435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=22435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}