How much passive income would it take to match the average UK take-home pay? Estimates put the monthly after-tax figure at around £2,400, based on early 2026 figures. So that’s £28,800 a year.

With an ISA to invest in, we don’t need to worry about tax. Whatever we take out of our ISAs, anything from a pound to a million, there’s no tax to pay.

We can currently transfer up to £20,000 a year into an ISA. But even if we can’t manage that much — and most of us can’t — matching that £2,400 can still be a worthwhile goal.

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.

Stocks and Shares ISA

Over the past 20 years, the FTSE 100 has managed average returns of 6.9% a year. That’s includes share price growth and dividends.

Someone who can max out their ISA limit could expect to see £1,380 a year in gains at that rate, or just £115 each month. And they’d need a pot of around £400,000 to reach the £2,400 monthly target. So even with a full 20 grand a year, you’d need to keep going for 20 years, right?

Well, actually, no. That’s because we haven’t considered how compound returns work. If we reinvest all our gains, each year we’ll have that bit more to base our future returns on. And it can make a surprising difference.

With consistent returns and all income reinvested, it would actually only take around 13 years to hit that passive income target.

Popular ISA stocks

Whatever each individual can invest, the secrets are to start as early as possible, make the most of each year’s ISA limit, and then plough any annual income back in. It might be tempting to take out some dividends but greater long-term success can come from resisting the temptation.

You might be wondering what the chart above is all about. It shows the two most popular stocks bought in Stocks and Shares ISA accounts so far in 2026. The top five actually vary week to week, and depending on which provider we ask.

But I like this chart, as it shows how very different performances can add up to ISA success. Rolls-Royce Holdings has soared in price over five years — but pays almost no dividends. The Legal & General (LSE: LGEN) share price however, has gone just about nowhere — but it’s actually the more popular pick of the two.

Why so popular?

Legal & General has a track record of paying high dividends. Forecasts put the yield at 8.6% right now, which alone is nicely ahead of those historic Footsie returns. And if we could achieve an 8.6% return consistently, that could shorten our timescale by another two years.

Legal & General does come with risk, as do all stocks and shares. In this case, it’s a company in a traditionally cyclical industry. The finance sector’s often one of the hardest hit in any economic crisis. And world economies aren’t exactly going swimmingly right now.

Looking at the past five years for these two also helps stress the vital need for diversification in a passive income ISA. And with that in mind, I rate Legal & General as one worth considering right now. And Rolls too, in fact.