The Stocks and Shares ISA is one of the most powerful tools in a UK investor’s arsenal. While capital gains and dividends are usually taxed, that’s not the case for any assets held inside an ISA, allowing even the average working-class Joe/Jo to build wealth tax-free, not just the super-rich.
So want to know how much money you could be making over the next decade?
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.
Projecting ISA returns
When investing with a Stocks and Shares ISA, the amount of wealth that can be unlocked depends on two factors:
- How much money is invested each month.
- What return a portfolio generates.
On average, the UK stock market tends to generate a total return (capital gains + dividends) of around 8% a year over the long run.
So assuming a portfolio matches this, after 10 years an investor could have:
- £18,294.60 when investing £100 a month – £6,294.60 in profit.
- £45,736.51 when investing £250 a month – £15,736.51 in profit.
- £91,473.02 when investing £500 a month – £31,473.02 in profit.
- £137,209.53 when investing £750 a month – £47,209.53 in profit.
Needless to say, the prospect of having as much as a six-figure nest egg over the next 10 years is quite exciting. Yet, investors could potentially earn even more…
Unlocking bigger gains
The numbers crunched so far assume that a portfolio will generate an 8% average return over the next decade. However, by investing in only the best and brightest of businesses, the returns can be far more impressive.
Take a look at Games Workshop (LSE:GAW) as a prime example to consider. The niche miniature manufacturer and creator of the Warhammer universes may not sound like a highly lucrative investment opportunity. But it’s actually evolved into one of the best-performing UK shares of the 21st century.
And in the last 10 years alone, the shares have averaged a jaw-dropping 51.2% annualised total return!
That means anyone who’s been consistently buying shares each month since April 2016 could now have:
- £350,327.49 when investing £100 a month – £338,327.49 in profit.
- £875,818.73 when investing £250 a month – £845,818.73 in profit.
- £1,751,637.45 when investing £500 a month – £1,691,637.45 in profit.
- £2,627,456.18 when investing £750 a month – £2,537,456.18 in profit.
That means an investor could have made over £2.5m over the last decade thanks to the power of compounding. And with a Stocks and Shares ISA, all of it can be enjoyed tax-free!
Still worth considering?
With a market-cap of £6.3bn, the days of 50%+ annualised returns are likely in the rear-view mirror. But that doesn’t mean the growth story’s over.
Management’s busy expanding with licensing to extend the reach of Warhammer franchises into new digital channels. This not only exposes new audiences to the group’s IP but serves as a powerful initial onboarding mechanism for its core high-margin miniatures business.
However, even with a stellar track record, Games Workshop isn’t a risk-free investment in 2026.
With all manufacturing done in the UK, the group’s exposed to Britain’s notoriously high energy prices. And since its miniatures are made from high-impact polystyrene – a petrochemical plastic – two key input costs are rising as a result of the war in Iran.
Nevertheless, with the company’s exceptional pricing power, margins could prove quite resilient. That’s why, despite the risks, investors looking to build a robust long-term Stocks and Shares ISA may want to consider taking a closer look at Games Workshop shares.
