I reckon those looking to earn a second income should consider a Stocks and Shares ISA. With all dividends and capital gains tax-free, it’s likely to grow in value more quickly than other types of investment products.

But how much would be needed to earn an income equivalent to the UK’s average salary? Let’s crunch some numbers.

Comparing like with like

According to latest figures, the typical Briton in full-time work earns £39,036 a year. However, unlike income received in an ISA, this is subject to tax.

It will therefore require fewer dividends to match the take-home pay from an equivalent salary. However, I’m going to ignore this important distinction.

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How do the numbers stack up?

Assuming it’s possible to build a portfolio of dividend shares yielding 6%, an ISA worth £650,600 would be needed to produce an annual second income of £39,036. How might this be achieved?

Well, it goes without saying that investing more for longer – at a higher rate of return — is going to create a bigger investment pot. The table below illustrates this. It shows the monthly investment needed to build an ISA of £650,600, depending on the length of time and growth rate achieved.

Annual growth rate	20 years	25 years	30 years
5%	£1,597	£1,107	£795
6%	£1,428	£958	£665
7%	£1,275	£827	£554
8%	£1,137	£712	£459

With a bit of patience and some disciplined investing, I believe it’s possible to build a healthy nest egg. Although there are no guarantees, history suggests a long-term return of up to 8% is achievable.

But is a dividend yield of 6% realistic?

Blue-chip stocks

At the moment (26 April), there are seven FTSE 100 stocks yielding over 6%. In fact, the average for the top 10 is 6.5%.

Top of the pile is Legal & General (LSE:LGEN), the savings, retirement, and life insurance specialist.

Based on amounts declared over the past 12 months, it’s presently offering a return on 8.6%. Apply this to our £650,600 ISA and a whopping annual income of £55,952 would result.

Of course, it wouldn’t be sensible owning just one stock. But as part of a diversified portfolio, I think Legal & General is a stock that could appeal to income investors.

The envy of others?

That’s because it has an enviable track record of payouts. During the pandemic, when most were cutting or suspending their dividends, the group kept it unchanged. It was last cut during the global financial crisis of 2008/09.

However, dividends are never guaranteed. Also, the group’s not immune from new entrants taking market share. And its enormous investment portfolio is likely to suffer during periods of market uncertainty. Both of these could affect the group’s earnings and – ultimately – its dividend.

However, for the time being at least, it’s winning lots of new pension schemes to manage. And in recent years, its annuities business has benefitted from a higher interest rate environment. This helped the group deliver a 9% year-on-year increase in operating earnings per share in 2025. It also raised its estimated store of future profit to £13.3bn.

In addition, the group retains a strong balance sheet with a Solvency II ratio that’s comfortably higher than many of its competitors. This should give it the financial strength to withstand future macroeconomic shocks better than most.

That’s why I believe Legal & General’s one of many high-yielding UK stocks that could be considered by those looking to supplement (or replace) their salaries with dividends.