Why £2,091 per month? It’s twice the UK State Pension. And trebling the state retirement income seems like an inspiring target.

And the beauty of an ISA is that all returns from it are free of tax. Dividends, capital gains… not a penny to pay.

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.

ISAs and SIPPs offer different tax advantages. So each investor needs to weigh up both in order to choose the best combination for their individual circumstances. But let’s use historic ISA returns to get an idea of the possibilities.

Stocks and Shares ISA gains

Historically, Stocks and Shares ISAs have done well. And over the past 10 years, we’ve seen an average annual return of 9.6%. It’s been an erratic decade, though, with some big ups and downs.

In 2019/20 ISA year, hammered by Covid, Stocks and Shares ISAs lost 13.3% on average. But the next year saw an average total return of 13.5%. That’s an impressive rebound in such a short time.

To earn £2,091 per month passive income, we’d need a pot of almost exactly £240,000. That does depend on a few things, though:

• The average annual 10.6% return continues
• We reinvest all our dividend income
• We diversify intelligently and minimise risk

Nothing is guaranteed. But on this example, an investor could hit the target and earn their monthly £2,091 by investing £500 per month for 16 years.

In reality, it has to be better to plan to invest for a bit longer than that, and set an annual return target a bit lower. How much to invest depends on each individual investor’s circumstances too… But going for the maximum you can comfortably manage will surely increase your chances of hitting your goals.

Dividends or growth?

These past returns are from a mix of share price growth and reinvested dividends. Rolls-Royce Holdings is a cracking example of the former, up more than 1,000% over five years. And the past five years have been good to bank stocks too, like Lloyds Banking Group.

And there are some tasty potential dividends around right now too. The Greencoat UK Wind (LSE: UKW) share price has suffered a poor decade, as the chart shows — as oil has regained popularity.

But it offers a huge 10.7% forecast dividend yield. And, Greencoat just lifted its annual dividend at least in line with inflation for the twelfth consecutive year — and plans to keep on doing so.

Long-term cash cow

Clearly, there’s a risk from focus moving away from renewable energy in today’s political climate. I’m convinced it has to come back eventually — but it might take a while. Still, since the Iran conflict, we’ve seen the Greencoat share price ticking up. Anything connected with geopolitics, however, always comes with danger.

But I do think investors should consider Greencoat UK Wind as part of a long-term ISA targeting passive income to beat the State Pension.

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Yet that’s not the only reason it’s become a sought-after dividend share more recently. Greencoat’s share price has tumbled 25% over the past five years, which has in turn supercharged its dividend yield, as the chart below shows.

For 2026, the dividend yield is a mighty 10.9%, reflecting analyst expectations of further dividend growth. The yield marches to 11.1% for next year, too.

The thing is, are Greencoat shares likely to keep sliding? And does the possibility of more gigantic dividends make it a top stock to consider anyway?

What’s been happening?

There are critical questions to ask. The benefit of a sky-high dividend payment can be offset (if not totally eliminated by) a sinking share price that decimates total returns.

Greencoat’s price performance since late 2022 reflects a much tougher time for renewable energy stocks more broadly. Why? A backdrop of higher-than-normal interest rates has put pressure on net asset values, reducing the worth of its energy portfolio. Bank of England (BoE) rate hikes have increased the cost of Greencoat’s borrowing, hitting earnings and potentially derailing its expansion plans.

That’s not all. More recently, the firm’s been hit by changes to renewables obligation certificates (ROCs), which link revenues to inflation. The problem is these are now based on CPI rather than RPI, which tends to be lower.

Will these problems continue? It’s possible. Rising inflationary pressures mean fresh BoE rate rises could be around the corner. And given the highly regulated nature of the energy market, policy changes like amendments to ROCs are an ever-present danger.

So what now?

Does this make Greencoat a dividend stock to avoid, then? I suppose it depends on the timescale over which an investor plans to hold its shares. In the coming months, its share price could remain over pressure. But I’m expecting it to recovery strongly over the long term, making it worth consideration from patient investors.

Make no mistake: renewable energy has considerable investment potential as the world switches from fossil fuels. It’s not just environmental concerns that are sparking this sea change. Geopolitical considerations are also driving this trend, as the Iran war and its impact on oil prices demonstrates perfectly. Accordingly, demand for cleaner energy should continue rising exponentially.

I also like Greencoat because of its focus on UK assets. This is one of the most favourable places to produce green energy anywhere in the world thanks to supportive government policy. With defensive day-to-day operations and great growth possibilities, I expect it to remain a top stock for reliable dividend growth.

Greencoat UK shares don’t just offer those double-digit dividend yields. They trade on a rock-bottom price-to-earnings (P/E) ratio of 7.7 times, and at a 26% discount to their NAV per share. With this sort of value, I think dividend investors should keep this stock in mind.

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Well, in one sense, it can look that easy. I see a handful of stocks in the FTSE 250 with forecast dividends of 10% or more. In reality, though, we do need to take a bit more care before we consider jumping in with both feet.

For one thing, companies do not guarantee their dividends. History, however, does show that dividends from the UK stock market have generated huge amounts of passive income for shareholders over the decades. Once 2025 is all totted up, analysts expect more than £80bn in dividends from FTSE 100 stocks alone.

One basket?

There’s a fair bit of danger in concentrating our investments in selected dividend stocks. And there are two main ways to reduce the risk. One is to diversify — somewhere between 10 and 15 stocks is a common recommendation. It can be a big help if we spread that diversification across different sectors too.

An additional approach is to be careful over the individual stocks we select. That means paying attention to how the dividends will be paid. Checking there’s enough cash coming in to cover them should be a key priority.

Being cautious does mean we most likely need to settle for an average dividend return of less than 10%. But today, I want to look at one that’s right up there.

What is it?

I’m talking about Greencoat UK Wind (LSE: UKW).

Greencoat owns and operates a portfolio of onshore and offshore wind farms across the UK. It’s structured as a real estate investment trust (REIT), and that can mean added tax advantages for a passive income portfolio.

Companies like this have fallen out of favour with today’s renewed pursuit of oil and gas. And Greencoat shares are well down from their peaks of a few years ago. That, however, has pushed the forecast dividend yield above 10%.

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.

Cash prospects

So, what are the chances of Greencoat maintaining its dividends? Forecasters think it can do it, after the company delivered its twelfth consecutive year of dividend rises in 2025. There was enough spare cash for £109m in share buybacks too. At results time, the board said it’s targeting a 3.4% dividend increase for 2026, in line with inflation.

Chair Lucinda Riches added: “Our structurally high dividend cover model is expected to deliver around £1 billion of excess cashflow over the next five years.“

I see continuing weak sentiment as one of the biggest threats. And if the dividend looks at all like faltering, investors could flee. But Greencoat UK Wind has to be worth considering for the 10% return it could add to a passive income portfolio. And remember, nobody can blockade the wind.

The post Here’s how £20,000 could be used to aim for an instant £2,000 passive income! appeared first on The Twelfth Magpie.

This approach can have both pros and cons. Here is a trio of things to think about when deciding whether it might make sense for your own SIPP.

Growth and income can both help you build wealth

Seeing dividends pile up can feel good, partly because they are not subject to tax while inside the SIPP wrapper.

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.

By contrast, putting money into a growth share and holding it potentially for decades without receiving a single dividend may seem less exciting. But growth shares can help build wealth, if they end up being sold at a higher price.

Dividend shares and growth shares typically offer different routes to trying to increase a SIPP’s value. In fact, it is possible for both to do so.

High yield can a red flag, but isn’t always

As a general rule, I think it makes sense to invest by finding good companies and then assessing whether their share price is attractive. In practice, a juicy dividend can sometimes distract investors who aim to do that.

They start by finding a high-yield share. They look at whether the payout is covered by earnings. Then, they try to convince themselves that the risks (such as the dividend being cancelled) are manageable.

Sometimes, though, a high yield can be a red flag that the City has doubts about whether a firm will be able to maintain its dividend.

Such dividends are sometimes cut or even cancelled. Others stay the same or grow – and investors can earn chunky passive income streams.

So I think it is important as an investor to be honest about the risks of a given share, not just the potential rewards.

Staying diversified always matters

Often, high-yield shares cluster together in certain stock market sectors.

Right now, for example, three of the FTSE 100’s five highest-yielding shares are financial services firms. The other two are property companies.

The FTSE 250 shows a different bias but the same pattern. All five of its highest-yielding shares are linked to renewable energy.

It is always important to manage investment risk by diversifying. With high-yield shares clustering in certain sectors, that can take a concerted effort.

By nature, a SIPP is a long-term investment vehicle. Its lifetime will likely involve periods when cyclical shares are at different points in the economic cycle. That could mean depressed share prices, dividend cuts, or both.

I did not own any renewable energy shares in my portfolio recently, so I took the chance to add Greencoat UK Wind (LSE: UKW).

The company owns stakes in a number of wind energy projects. That has helped it grow its dividends annually in recent years. The current dividend yield is 10.7%.

The share also sells for a substantial discount to its net asset value, suggesting it could be a bargain.

Still, as the past year’s share price performance and high yield suggest, some investors are nervous about the prospects for energy funds, including this one. Changing attitudes on energy policy combined with current energy price volatility could hurt profitability.

I reckon those fears are more than factored into the current share price, though, so I happily bought the share for its passive income potential.                  

The post Thinking of stuffing a SIPP with high-yield shares? 3 things to consider appeared first on The Twelfth Magpie.

We don’t need to actually invest our ISA cash before the deadline. We only need to get it transferred into our accounts. But while share prices are down — and dividend yields are up — it can be good sense to make the most of today’s more attractive valuations.

Top investment trust

Greencoat UK Wind (LSE: UKW) has been catching the eye of investors. In fact, at interactive investor it was the most popular investment trust bought in February. And I reckon it’s likely to be up there in March too.

With a massive 11% forecast dividend yield, the attraction seems clear. A bigger yield is one positive outcome from a falling share price. And Greencoat shares have been sliding over the past few years, as global attention has shifted sharply to oil and gas again.

Talking of oil and gas, Brent crude has topped $110 per barrel. And doesn’t that remind us of the many benefits we can potentially reap from renewable energy sources like wind power? Individual countries have no special control of it, and there are no supply lines that can be choked off in times of geopolitical crisis.

Why investment trusts?

I really like investment trusts as they can give individual investors the opportunity to put some cash into assets that would otherwise be unattainable. In this case, that’s a large portfolio of onshore and offshore wind farms across the UK. North Sea oil might run out, but I can’t see these gusty isles becalmed any time soon.

An investment trust can also be a good vehicle for keeping dividend payments steady. Unlike some other collective investments, they can hold back cash in strong years to help even out payments in weaker times.

Saying that, nobody seems to be expecting any dips. Instead, forecasts indicate continuing dividend rises over the next three years. And at results time in February, the company reminded us it had achieved its twelfth consecutive year of dividend increases. And management intends to grow it in line with CPI inflation. There was enough cash for a £109m share buyback too.

Any dangers?

No investment comes without risk. There’s no such thing as a guaranteed dividend, for one thing. Greencoat also carries net debt of around £1.7bn — and servicing that costs money.

Soaring oil prices might highlight the benefits of wind power. But they also push up inflation, and that could lead to higher interest rate costs for debt-funded companies like Greencoat.

But on balance, I’m optimistic that Greencoat’s cash generation can keep its dividends growing in line with inflation. I think it’s an attractive long-term option to consider for an ISA.

The post Here’s a top dividend share to consider buying for your ISA right now appeared first on The Twelfth Magpie.

Investor sentiment surrounding renewables right now is pretty weak, and quite understandable given the uncertainty and pressure created by higher interest rates, slower wind speeds, and indirect subsidy cuts.

Yet even with these pressures, net cash generation by the firm’s diversified portfolio of wind farms is still more than enough to cover the chunky yield. So has weak sentiment secretly created a rare and irrational buying opportunity?

What’s going on with Greencoat?

Over the last three years, Greencoat UK Wind shares have fallen by just over 30%. This wasn’t the only renewal energy trust to have been sold off. But as a consequence, the stock now trades at close to a 25% discount to its underlying net asset value.

As mentioned, higher interest rates have taken their toll, dragging down the group’s net asset value and pushing up its interest expenses on outstanding debts. Meanwhile, the recent switch from RPI to CPI inflation-linking for Renewables Obligation Certificates has only applied more pressure.

But are investors being overly pessimistic? After all, while the pressures are real, cash flows are nonetheless proving quite resilient, with £290.6m generated in 2025 versus £227m paid out as dividends. This generation has even improved compared to the £278.7m generated in 2024. And with the Iran conflict spiking energy costs, cash flow appears to be on track to expand once again in 2026.

Is now the perfect time to be a contrarian and snap up some shares?

Where’s the risk?

Even though dividends remain covered by cash flows, Greencoat shares are still far from risk-free. A genuine point of contention that’s been steadily brewing outside the world of macroeconomics is low wind speeds. For the last five years, the UK has seen slower speeds versus the long-term historical average – a factor that’s directly weighed on Greencoat’s energy-generating performance.

Even if energy prices rise in 2026, if wind speeds remain below average, the company may be unable to take advantage.

There’s also an element of evolving political risk. While another UK general election is still several years away, current polling suggests that a Reform UK government could end up moving into Downing Street – a party whose policies on renewables are far less supportive.

So where does that leave investors today?

The bottom line

There’s no denying that Greencoat shares are shrouded in uncertainty. If wind speeds remain weak or power prices continue on their long-term downward trend (even with a short-term spike), pressure on cash flow could indeed put dividends at risk.

However, despite the pessimism surrounding this sector, this outcome’s far from guaranteed. And with Greencoat’s financials still relatively robust, contrarian investors might indeed want to take a closer look.

The post With a 10.3% yield, could this be the FTSE 250’s best income stock? appeared first on The Twelfth Magpie.

The yield was not the only reason I bought — after all, dividends are never guaranteed to last.

But the passive income potential was a large part of what swayed me to make this investment.

A proven business model but unpopular business area

What was this share, you may wonder? Greencoat UK Wind (LSE: UKW).

Greencoat UK Wind is an investment fund that, through a portfolio of renewable energy assets in Britain, aims to grow its dividend per share annually in line with the Retail Price Index, a leading measure of inflation.

Such an approach means that the dividend ought not to lose value over time in terms of real spending power.

The fund has steadily delivered on its dividend objective for the past 12 years in a row.

But it currently sells for a 27% discount to its net asset value. Its share price has fallen 13% over the past year, while the wider FTSE 250 index has moved up 8% during that time.

What’s going on?

I think Greencoat UK Wind, like some other FTSE 250 income shares in the renewable energy space, is suffering from investor concerns about what shifting trends in energy policy may mean for such funds.

If the demand for renewable energy wanes, there is a risk that the sort of assets Greencoat UK Wind has invested in could see their valuations drop. That helps explain the gap between the share price and net asset value.

Might the market be missing something?

I am not so bearish on this sector, though.

Greencoat sold £181m of assets last year, and those sales were in line with the net asset values on its books. That suggests that, while the stock market is discounting the fund’s asset value, the asset resale market is not.

Even partially closing the gap between the stated net asset value and share price could help boost the FTSE 250 share considerably.

Meanwhile, those juicy dividends keep coming.

Will they last? The risk of higher interest costs could eat into profitability, as the fund needs to service its debt.

But Greencoat UK Wind remains strongly cash generative, it plans to sell more assets and cut debt, and share buybacks could also help boost its value as the company can currently buy and cancel shares for well below their net asset value. That ought to boost the net asset value per share of the outstanding shares.

Greencoat UK Wind is among multiple renewable energy shares that have been marked down substantially in recent years. Clearly investors are nervous about changing priorities in UK energy policy and what that might mean for businesses focussed on wind and solar power.

But I like the ongoing dividend prospects. Even without further growth in dividend per share (which I expect, in line with the fund’s policy), a yield north of 10% is highly attractive to me when I think the payout can be sustained. Here, I am optimistic it can.

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Why? Because cash flows are often inflation resistant and shareholders can enjoy enormous payouts, leading to higher yields, even more so in 2026 when REITs are trading at large discounts.

That’s why I’ve already added one of these passive income stocks to my portfolio… and another REIT-like stock could be on the verge of skyrocketing!

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.

A tasty 5.8% dividend yield

Let’s start with the boring-but-dependable REIT in my income portfolio: LondonMetric Property (LSE:LMP).

This business is a diversified commercial landlord – one of the largest in the FTSE 100. It has a £7.4bn real estate portfolio generating a £421m annual rent roll from some of the biggest enterprises in Britain. This includes Amazon, Tesco, Premier Inn, Aldi, Marks and Spencer, and FedEx, among many others.

With its tenants almost entirely consisting of large-scale businesses, the firm’s cash flows are exceptionally reliable, with rent collection standing at a rock solid 99.5%, occupancy at 98.1%, and the average duration of its leases sitting at 16.4 years.

Combined, this translates into impressive long-term revenue and earnings visibility. And management has leveraged this advantage to continuously reward shareholders with ever increasing dividends, translating into 10 years of continuous payout hikes.

The company has been leveraging its size to acquire smaller distressed REITs in recent years at a discounted price. But it’s taken on debt to do so, resulting in notable strategic risk. After all, if acquired properties fail to live up to performance expectations, the company’s saddling the balance sheet with additional value-destroying leverage.

Nevertheless, its exceptional track record speaks volumes. And with a 5.8% yield, it’s a risk I think is worth considering.

An incoming dividend surge?

Another income stock that behaves like a REIT in my portfolio is Greencoat UK Wind (LSE:UKW) – a renewable energy infrastructure investment trust. In recent years, investor sentiment surrounding renewables has plummeted on the back of higher interest rates and cuts in government subsidies. As such, the shares trade at a chunky 28% discount to net asset value, paying an enormous 10.8% dividend yield.

Here’s where things get interesting.

Due to the complex energy pricing mechanisms in the UK, natural gas almost always sets the price at which energy generators can sell their electricity.

With war breaking out in Iran, natural gas prices have surged. And unless the tragic conflict ends swiftly, UK energy prices are on track to follow.

The war is bad news for humanity in general and energy prices are an issue for households specifically. But it’s fantastic news for Greencoat.

With fixed energy production costs, price spikes open the door to enormous profit margin expansion. And we’ve seen this play out first hand in 2022, where Greencoat’s energy profits more than doubled, from £257m to £560m!

While exciting, it’s important to recognise that this windfall may only be temporary. If hostilities with Iran de-escalate, natural gas prices could reverse.

What’s more, even if energy prices stay elevated for longer, another round of windfall taxes on energy generators from the government seems quite likely – especially given the current state of public finances.

Nevertheless, with Greencoat shares still trading at an enormous discount, the market doesn’t appear to have priced in this incoming revenue catalyst. And while this REIT-like stock certainly comes with a higher level of risk, it once again might be worth thinking about.

The post 1 REIT I own for a lifetime of passive income! appeared first on The Twelfth Magpie.

Middle East turmoil is causing big upsets in some markets, as South Korea’s Kospi index just recorded a huge 12% fall. For now at least, UK and US markets are avoiding panic. The Footsie might have slipped 4% from its recent peak, but it’s still up 6% so far in 2026.

What should we do?

With the Brent crude oil price rising to more than $80 a barrel, there’s a clear temptation to look towards big oil companies. At BP, we see the share price up a bit since the attacks on Iran started — and it hit a 52-week high on Monday (2 March). But at the time of writing on 4 March, it’s retreated around 3% from that peak.

There’s a similar story at Shell. It made a new 52-week high on the same day — and it’s since declined nearly 5%. For both big oil stocks, the ups and downs of the past week fade into barely-noticeable ripples in their five-year share price charts. Over that timescale, BP is up 55%, while Shell has doubled.

Investors eyeing up oil shares really need to make their decisions based on long-term prospects, I’d say. And I see good arguments for both on those grounds. The forecast 5% dividend yield at BP seems particularly worthy of consideration. But I won’t buy either based on short-term shocks.

Long-term energy

What if there’s an energy stock that could have a rosy long-term future? One that also offers a massive forecast dividend yield of 11%? Yes, I know, I’ve given it away with the above chart. I’m talking of real estate investment trust (REIT) Greencoat UK Wind (LSE: UKW), one of my favourite Stocks and Shares ISA candidates.

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.

The share price is down since companies unceremoniously abandoned all those low-energy, net-zero targets. And there’s one thing in the numbers that makes me nervous. With February’s full-year results, the company posted a loss in 2025. And that’s not what high-yield dividends usually are made of.

Still, the board raised the dividend, and said it aims to keep it in line with CPI inflation. We need to keep our eyes sharp here, but I think it has to be worth considering.

What global risk?

What I really like about Greencoat is that it relies on wind. And there’s no shortage of that in the UK, or around the world. Winds of one direction or another are blowing almost everywhere. Also, we don’t have an atmospheric equivalent of the Strait of Hormuz for any nation to block.

So what about the stock market crash thing? This is one example of how we might look for opportunities in sectors currently in the headlines. Generally, I say stay calm, and look for good-value shares… but I see no need to rush into anything.

The post Has a 2026 stock market crash just come a whole lot closer? appeared first on The Twelfth Magpie.

From a passive income perspective, a juicy dividend yield can be very attractive. On the other hand, it can also be a red flag that investors expect a cut in the payout down the line.

So it grabbed my attention today (26 February) when a UK share that already yields a whopping 11% raised its dividend per share yet again.

Inflation-busting performance

That share is Greencoat UK Wind (LSE: UKW).

Its full-year dividend per share has been increased to 10.35p, making this the twelfth year in a row that it has grown in line with or faster than the Retail Price Index, a common measure of inflation.

As this share sells for pennies, that makes it a high-yield option I think income-focussed investors should consider.

Is there a catch?

But could this be too good to be true?

After all, Greencoat UK Wind’s high yield is far above that of most other FTSE 250 shares.

It also sells at a deep discount to its net asset value (NAV).

Greencoat UK Wind is not alone here. A number of renewable energy focussed FTSE 250 shares have high yields and sell well below their net asset value.

Shifting policy focus when it comes to renewable energy has raised concerns about the long-term profitability of the sector. That could be a risk to profits and therefore the dividend at Greencoat UK Wind.

The company is aware of this. As it said in its results statement, “wider economic and regulatory factors, along with falling NAVs across the sector, have weighed on investor sentiment… The Board and Investment Manager recognise the need to continue to take further action to protect and build shareholder value”.

I see a lot to like here

In reality there is only so much that management can do in the face of such investor sentiment.

Using spare cash to buy back shares at a discount could help create value for shareholders. Last year, Greencoat UK Wind spent £109m buying back its own shares.

The company also reduced its debt principal by £168m, something I see as positive for the investment case.

But while such moves might help unlock some value, I reckon the share price could keep struggling until either there is a wholesale reassessment of the sector by investors, or else someone decides to bid for the company.

That has not happened yet and perhaps never will. Given the discount to NAV, I am sure some potential buyers must have run the numbers on Greencoat UK Wind from time to time.

As a believer in long-term investing, though, I see the depressed share price – down 26% in five years – as an opportunity. Along with steady dividend increases, it has helped push the yield up.

The company spent £227m on dividends last year but still ended the year with more cash than when it began. With its high yield, I see this as share for investors who want to try and build passive income streams to consider.

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