Best place to get Income rather than growth from an ISA?

Ad_Astra

Many thanks a lot of useful information in the replies. Lots for me to think about e.g. I was not aware of Investment Trusts that maybe a good route to follow. 

dunstonh

I have accumulated approx. £200k in a self-selected stocks and shares ISA that I am looking to use as part of my retirement plan. 

Any reason why ISA and not pension?  Pension trumps ISA for retirement provision.

I do not have any need to draw down on the capital but I am looking at getting an income rather than growth going forward. 

Any reason you are favouring yield over total return?

What kind of ISA should I consider transferring my stocks and shares ISA into to get the best income stream?

Its not the ISA wrapper that makes the difference.  It is the investment strategy and drawdown strategy you intend to use that matters.   For example, for income, we frequently use a mixture of yield into cash float and bucketing with fixed monthly draw as most people don't like variable yield.   Plus, it usually means using managed fund when you go for high yield.

amanda1024

A lot depends on your attitude to risk, also whether you value predictable income and how far ahead you’re thinking. An annuity could be another option, or moving some into high interest cash ISAs would give guaranteed interest income.

dunstonh

amanda1024 said:

A lot depends on your attitude to risk, also whether you value predictable income and how far ahead you’re thinking. An annuity could be another option, or moving some into high interest cash ISAs would give guaranteed interest income.

Using cash for long term income provision is actually quite high risk.  Cash has its place in the overall scenario but the loss of value in real terms over 30-40 years can result in a spiral of loss that causes the money to run out.

LHW99

I have built a SIPP portfolio gradually over a number of years that will provide the additional income via natural yield that we, as a couple, will need.

I have a range of both funds and IT's, with a global spread, some of which are low yield (1%-2%) some medium yield (3%, 4%) and a couple with higher yields. Both income and capital value have grown, possibly not as much as going for a pure growth strategy would have done WRT the capital, but the income level has grown far more steadily than the capital value, particularly since Covid.

Initially, having cut down the range of possible funds filling each niche, I then tried to ensure the TER / OCF was as low as possible, and definately below 1% if available (not always in certain sectors like private equity).

It's done / doing what it was aimed to do, and although the original plan was for the SIPPs, we have small S&S ISA's where the investments have also been chosen to fit with the overall strategy.

Ad_Astra

Thanks for all the replies, I feel happier now to move my S&S Shares ISA into an income fund of some kind. I used the link above to look at Investment Trusts picked one Fidelity Special Values to just have an initial look, they list dividend per year but no graph so easy for me to put into Excel and draw some graphs. What I do not understand is the twice a year payment. E.g.

div date	Payment date	Dividend amount
30/11/2023	10/01/2024	6.27
11/05/2023	21/06/2023	2.53

So for 2023 was that 6.27% and 2.53% over 6 months or 12 months? For example if I had 200,000 invested would I have got 16,452 (i.e. a years worth @ 6.27%) or 8,226 (six months worth @ 6.27%) on 10 Jan 2024?

For the year 2023 total Is it 2.53% of 20,000 + 6.27% of 20,000 or that total divided by two? 

wmb194

Ad_Astra said:

Thanks for all the replies, I feel happier now to move my S&S Shares ISA into an income fund of some kind. I used the link above to look at Investment Trusts picked one Fidelity Special Values to just have an initial look, they list dividend per year but no graph so easy for me to put into Excel and draw some graphs. What I do not understand is the twice a year payment. E.g.

div date	Payment date	Dividend amount
30/11/2023	10/01/2024	6.27
11/05/2023	21/06/2023	2.53

So for 2023 was that 6.27% and 2.53% over 6 months or 12 months? For example if I had 200,000 invested would I have got 16,452 (i.e. a years worth @ 6.27%) or 8,226 (six months worth @ 6.27%) on 10 Jan 2024?

For the year 2023 total Is it 2.53% of 20,000 + 6.27% of 20,000 or that total divided by two? 

That’s 6.27p (pence) and 2.53p. Based on its current price of 275p that’s a trailing annual yield of 3.2% (it pays twice a year).

Ad_Astra

Ah pence, the yield did look high for a percentage