A Stocks and Shares ISA can be a win-win for investors. That’s because all capital gains and dividends can be enjoyed tax-free, which means it’s possible to build wealth faster than using other types of investment accounts.
Given these benefits, how large does an ISA need to be to generate a monthly income of £900? More importantly, how quickly could this happen? Let’s do a bit of number crunching to find out.
A bit of maths
To answer these questions, it’s first necessary to consider the dividends on offer. For example, with a 6% yield — close to the return of the 10 highest-yielding FTSE 100 stocks at the moment (20 March) — an ISA would need to be worth £180,000 to produce £900 a month.
How could someone build an investment pot worth this much? Fortunately, there are plenty of online calculators available to help with the maths. The table below illustrates how long it would take depending on the amount invested each month and the annual rate of return.
| Period/Annual return | 6% | 7% | 8% |
|---|---|---|---|
| 10 years | 1,103 | 1,047 | 993 |
| 15 years | 625 | 576 | 530 |
| 20 years | 396 | 353 | 315 |
| 25 years | 265 | 229 | 197 |
It shows that investing £396 a month for 20 years would grow to around £180,000, assuming an annual growth rate of 6%.
Something else to consider
One of the FTSE 100’s top 10 income stocks is LondonMetric Property (LSE:LMP). It owns a £7.4bn portfolio of properties principally in the logistics, leisure, and healthcare sectors.
The trust specialises in triple net leases, where its tenants pay rent plus all property taxes, insurance, and maintenance costs. Its legal status is that of a real estate investment trust (REIT), which means it must return 90% of its rental profit to shareholders by way of dividends each year.
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.
A rising yield
Based on amounts paid over the past 12 months, it’s currently yielding 6.5%. Apply this to our £180,000 ISA and it would produce a monthly passive income of £975.
As the table below shows, LondonMetric Property has consistently offered an above-average yield over the past 10 years.
| Financial year | Share price (pence) | Dividend (pence) | Yield (%) |
|---|---|---|---|
| 2025 | 183 | 12.0 | 6.6 |
| 2024 | 203 | 10.2 | 5.0 |
| 2023 | 176 | 9.5 | 5.4 |
| 2022 | 276 | 9.25 | 3.4 |
| 2021 | 214 | 8.65 | 4.1 |
| 2020 | 176 | 8.3 | 4.7 |
| 2019 | 200 | 8.2 | 4.1 |
| 2018 | 178 | 7.9 | 4.4 |
| 2017 | 160 | 7.5 | 4.7 |
| 2016 | 159 | 7.545 | 4.8 |
Since the pandemic, it’s seen its share price drift lower. At the same time, it’s increased the payout – its dividend in 2025 was 45% higher than in 2020 – helping to push its yield higher.
It recorded its 10th successive year of dividend increases in 2025.
However, with debt of £2.8bn (at 30 September 2025), it’s vulnerable to rising interest rates. Not only would this increase borrowing costs but it could also limit the group’s capacity to take on more debt to buy additional properties and, therefore, restrict its future growth.
Final thoughts
Personally, I think the REIT has lots going for it. It’s exposed to areas of the UK commercial property market that, in my opinion, are likely to grow faster than the average for the sector as a whole. Indeed, analysts have a 12-month share price target that’s 22% higher than today’s value.
Also, the group enjoys a 98.1% occupancy rate and a weighted average unexpired lease term (WAULT) of 16.4 years. Both these factors help give some certainty over the level and longevity of its future revenue. In addition, 77% of its rents are subject to contractual uplifts.
For these reasons, I believe investors looking to generate a healthy additional income stream from their Stocks and Shares ISA could consider taking a position in LondonMetric Property.
