How much passive income can I provide £ 20,000 per year?

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. London Stock Exchange – more precisely, FTSE 100 – It is a popular place for investors to hunt for passive income. Great Britain is notable for the culture of paying immense and consistent dividends. And FOOTSE is full of actions whose robust balance sheets, leading on the market, and diverse streams of income provide companies with firepower to provide decent dividends with time.

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However, the exact amount of the dividend income that the investor performs may vary depending on the action. And thanks to hundreds of supplies paying dividends to choose from, the amount that one person causes can look completely different than someone else.

Despite this, with ISA allowance and shares in the amount of 20,000 pounds, I am sure that investors can reach a tasty four -digit dividend income every year.

Diversification of success

As I say, dividends paid by Great Britain shares are impressive according to global standards. But shareholders withdrawals are never guaranteed, and earlier results are not always a reliable guide to future returns.

To take ShellFor example, which has not circumscribed annual dividends since World War II, until the global pandemic appeared in 2020. DiageoHe intends to reduce dividends as destitute sales and the influence of American tariffs. Payments here grew in the reported currencies each year from the slow 90s.

However, ISA investors can significantly reduce (if not eliminated) the risk of such events in terms of their income by diversification. Having a dividend spare basket can significantly reduce the impact on the total passive income of the unit.

FTSE 100 portfolio

Here is the portfolio of 10 separate dividend shares, which in time can ensure immense and reliable income.

With a high dividend of 5.8% on average – above the average FTSE 100 3.4% – they can provide a second income of 1160 GBP in the next 12 months, based on the spread of ISA investment worth 20,000 GBP.

Dividend participation Sector Forward dividend performance
Legal and general Financial services 8.6%
Severn Trent Tools 4.6%
Aviva (Lse: of.) Financial services 6.2%
Worlds Production 5.1%
Unite Real estate investment trust (REIT) 4.5%
HSBC Banking 5.7%
Red River Mining 6.4%
Vodafone Telecommunication 5.5%
WPP Media 7%
GSK Pharmaceuticals 4.5%

As I say, the portfolio (like everyone) does not come without danger. Both Vodafone and Rio Tinto have recently reduced dividends in response to tough trade conditions and/or balance sheet fears.

But this collection of high -quality FTSE 100 shares combines high yields with diversification in different sectors, reducing the risk while maintaining robust income potential. I have four of these dividend actions in my own portfolio.

Aviva is my fifth largest single today. After a immense restructuring AND Invest for height. From December, its capital rate of solvency was 201%.

Thanks to solid financial foundations, it can continue building and acquiring capital companies to raise the dividends of long -term profits (and what is the extension). His planned acquisition of 3.7 million pounds Direct line It is a great example of how he uses his cash reserves with good results.

Dividends may be threatened when the deterioration of the economic conjunction suppress financial expenditure. But in the longer horizon I think it will remain the highest quality dividend reserves.

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