Investing For Income Ideas
If you are looking to invest with the aim of generating a reliable income, you need to choose carefully where to put your money.
Many finance companies offer specialist income plans designed to provide a regular monthly income, or longer term income boosts, so if this is your goal, it is well worth doing some research into the available options and see which best matches your income requirements.
Because ISAs allow you to earn interest tax-free, they are a popular choice with those looking to earn an income from their investments. The following are 5 of the top ISA income plans we have identified which offer good monthly returns for your investment.
1) Investec FTSE 100 Enhanced Income Plan
This plan offers a fixed monthly income for 5 years, giving 0.38% interest each month, equivalent to 4.56% gross per year. The minimum investment is £3,000 and the maximum is £20,000 for an ISA account or £1,000,000 for a non-ISA account.
At the end of the plan you will get your initial capital back, subject to the FTSE 100 index’s performance. With average longer term savings currently offering interest at around 2.20% fixed, a 4.56% per year fixed income could be a good investment, if you are willing to risk your capital.
2) Focus FTSE Monthly Income Plan
This plan can be used with direct investments and pension investments and is open to individuals, businesses, charities and trusts. It provides a fixed monthly income of 0.35% (equivalent to 4.20% annually).
The minimum investment is £5,000 and the maximum is £20,000 for ISA accounts, while there is no limit for direct investments. At the end of the plan, your capital will be returned unless the FTSE falls by over 40%. This, again, offers significantly better returns than current long term savings rates.
3) Investec Enhanced Kick Out Plan
Rather than offering a regular monthly income, this plan offers the potential for maturity at the end of each year of the plan, which can run for up to 6 years. The plan kicks out, offering a 10.25% return if the five-day average closing level of the FTSE 100 is higher than when the plan began.
The benefit of this plan is that it can provide a competitive return even when the FTSE stays relatively flat. The minimum investment is £3,000 and the maximum is £20,000 for an ISA investment or £1,000,000 for a non-ISA investment.
4) Virgin Money Stocks and Shares ISAs
Virgin Money offer various stocks and shares ISAs for those looking to generate an income from their savings. These include:
Bond and Gilt Fund – a low risk fund invested in government-issued bonds and highly rated companies.
Bond, Gilt and UK Share Fund – splits your investment between UK shares and lower risk bonds from the government and highly rated companies.
Bond, Gilt, UK and Overseas Share Fund – spreads your investment across various asset types, including overseas shares to give your investment more diversity.
UK FTSE All-Share Fund – invests your capital into 600+ companies on the FTSE All-Share Index.
Global Share Fund – spreads your investment across shares in different countries and regions for a geographically diverse investment portfolio.
5) Nutmeg ISAs
Nutmeg offer straightforward, flexible investment ISAs with a minimum investment of £500 and no minimum investment period, making them attractive for less experienced investors. Nutmeg provide diversified investment portfolios managed by an experienced team for a low fee of 0.25-0.75%.
You can set up a new ISA online in minutes and withdraw your money any time. You can also create separate investments at different risk levels, letting you plan for different income and savings goals.
Compare investing for income products
Knowing which investment plan will best match your income goals can be tricky. While the five investment ideas shared in this article offer some of the best deals currently on the market, there are many other options you can also choose from. Take a look at the range of investment ISAs on our website for more ideas.