By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Make Financial CenterMake Financial CenterMake Financial Center
  • Home
  • Investing
  • Banking
  • Credit Cards
  • Mortgages
  • Money Management
  • Marketing
  • Retirement
Reading: How I’d invest a £100K SIPP to target £8K in dividends annually
Notification Show More
Make Financial CenterMake Financial Center
Search
  • Home
  • Investing
  • Banking
  • Credit Cards
  • Mortgages
  • Money Management
  • Marketing
  • Retirement
© 2024 All Rights Reserved | Powered By Make Financial Center
Retirement

How I’d invest a £100K SIPP to target £8K in dividends annually

Make Financial Center May 9, 2024
Share
4 Min Read
Senior woman potting plant in garden at home
SHARE

Picture supply: Getty Photographs

Contents
A phrase about compoundingConcentrating on an 8% yieldSelecting shares for a SIPP

A SIPP could be a helpful solution to generate earnings, whether or not to attract down now (in some instances) or reinvest to construct the long-term worth of the SIPP.

I feel the present inventory market provides some glorious alternatives for me to generate earnings in my SIPP whereas investing in blue-chip FTSE 100 dividend shares.

Right here is how I might use a £100K SIPP to focus on £8K yearly in dividends.

A phrase about compounding

Earlier than I’m going on, let me clarify why I discussed constructing the long-value of a SIPP by reinvesting dividends earned from the shares I personal in it.

That is named compounding. Legendary investor Warren Buffett compares compounding to pushing a snowball downhill. Because it goes, it picks up extra snow and in time that picks up snow.

Within the case of a SIPP that ‘snow’ is cash from dividends – and my timeframe could be lengthy sufficient for the affect to be sizeable.

If I compound a £100K SIPP at 8% yearly for the subsequent 25 years (with out including a penny of recent capital), on the finish of the interval it is going to be value round £684,00 and earn me some £54,780 in dividends yearly. That could possibly be very helpful retirement earnings!

Concentrating on an 8% yield

To earn £8K yearly from a £100K SIPP, I must earn a median dividend yield of 8% (after the affect of charges; in actuality, I’d select my SIPP fastidiously as over a very long time interval such charges can eat into my returns rather a lot).

However I’d not begin simply by searching for high-yield shares. In spite of everything, dividends could be cancelled at any second.

I’d search for what I feel are good companies with some aggressive edge that may assist them to do nicely in a sizeable, resilient market. Solely then would I take into account yield.

As 8% is a median, I might spend money on shares with a decrease yield so long as I nonetheless achieved my goal general. I’d diversify my SIPP throughout a variety of shares to scale back the affect if one of many shares carried out poorly or axed its dividend.

Selecting shares for a SIPP

As a long-term investor, the type of timeframe generally related to a SIPP is sensible to me. It helps focus my thoughts on discovering shares to purchase that I imagine have glorious long-term business prospects.

An instance is monetary providers supplier M&G (LSE: MNG).

The asset supervisor has a buyer base within the thousands and thousands, operates in a number of dozen markets, has a well-recognised model and may profit from sturdy demand for asset administration.

Because the market is crowded, one danger I see is opponents pushing down revenue margins. However over the long run I feel M&G can do very nicely. It’s a good-looking dividend payer. In the mean time, M&G shares yield 8.8%.

Lately, the agency has raised its annual payout. It might achieve this once more in future.

You Might Also Like

Want to become an ISA millionaire? Here’s one way to target stock market riches with £500 a month

This SIPP strategy turned £5,000 into a small fortune! Could it work again?

No savings at 40? Here are 3 steps to target a comfortable retirement with UK shares

What sort of shares can make sense to buy for a SIPP?

134,000 reasons why I prefer FTSE 100 stocks over cash savings!

TAGGED: Retirement
Make Financial Center May 9, 2024 May 9, 2024
Share This Article
Facebook Twitter Copy Link
Previous Article 5 Weight-Loss Drugs To Watch 5 Weight-Loss Drugs To Watch
Next Article How To Buy A Second Home How To Buy A Second Home
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Latest News

Inspiring Content Personalization Examples For B2B
Inspiring Content Personalization Examples For B2B
Marketing August 3, 2025
Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Want to become an ISA millionaire? Here’s one way to target stock market riches with £500 a month
Retirement August 2, 2025
What Are Some Popular Alternative Investments For Making Money?
What Are Some Popular Alternative Investments For Making Money?
Investing August 2, 2025
Response to ChatGPT $20 Plan: Take My Money!
Response to ChatGPT $20 Plan: Take My Money!
Marketing August 1, 2025
Group of friends talking by pool side
This SIPP strategy turned £5,000 into a small fortune! Could it work again?
Retirement July 31, 2025
What Are Stablecoins? | Bankrate
What Are Stablecoins? | Bankrate
Investing July 31, 2025

You Might also Like

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Retirement

Want to become an ISA millionaire? Here’s one way to target stock market riches with £500 a month

August 2, 2025
Group of friends talking by pool side
Retirement

This SIPP strategy turned £5,000 into a small fortune! Could it work again?

July 31, 2025
ISA inflows are booming! But are savers making a fatal mistake?
Retirement

No savings at 40? Here are 3 steps to target a comfortable retirement with UK shares

July 29, 2025
A senior man and his wife holding hands walking up a hill on a footpath looking away from the camera at the view. The fishing village of Polperro is behind them.
Retirement

What sort of shares can make sense to buy for a SIPP?

July 27, 2025

About Us

Welcome to MakeFinancialCenter, your go-to resource for all things finance. We are dedicated to providing insightful and practical information to help you make informed financial decisions.

Quick Links

  • Investing
  • Banking
  • Credit Cards
  • Mortgages
  • Money Management
  • Marketing
  • Retirement
  • Investing
  • Banking
  • Credit Cards
  • Mortgages
  • Money Management
  • Marketing
  • Retirement

Trending News

Inspiring Content Personalization Examples For B2B

Inspiring Content Personalization Examples For B2B

Average Money Market Account Rates for April 2024

Average Money Market Account Rates for April 2024

7 Of The Weirdest, Wildest, Oddball ETFs

7 Of The Weirdest, Wildest, Oddball ETFs

Inspiring Content Personalization Examples For B2B
Inspiring Content Personalization Examples For B2B
August 3, 2025
Average Money Market Account Rates for April 2024
Average Money Market Account Rates for April 2024
April 10, 2024
7 Of The Weirdest, Wildest, Oddball ETFs
7 Of The Weirdest, Wildest, Oddball ETFs
April 10, 2024
Teaching My Two Young Daughters About Money
Teaching My Two Young Daughters About Money
April 10, 2024
  • About Us
  • Contact Us
  • Disclaimer
  • Privacy Policy
  • Terms of Service
© 2024 All Rights Reserved | Powered By Make Financial Center
Welcome Back!

Sign in to your account

Lost your password?