Could your ISA buy you 10 years of freedom?

The value of your investments and the income you receive from them can go up and down, and you may get back less than you invest. Any examples are for illustration purposes only. ISA eligibility and tax rules apply.

We start with the best intentions, we really do. But sometimes personal finance and investment writers are guilty (me included) of veering away from the ‘personal’ and into the ‘finance’ a bit too much.

It often happens when we try to demonstrate the value of investing through a stocks and shares ISA. The illustrations of long-term investment growth we see (thanks to the glory of compounding) do tend to underline the tax efficiencies on offer but they often focus on the theory and aspiration rather than the reality most of us live in.

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It’s likely why we see the ‘ISA millionaire’ articles most years - the double-comma club is pretty iconic and hits our unofficial definition of what it means to be rich. Is it the most relevant journey or goal for us all though? It’s a lovely round number but, given we’re all so different, with a whole spectrum of savings capabilities and end goals, I often wonder how many of us the ISA millionaire sums actually help.

What about the idea of buying back time instead? What if you could invest with the aim of ultimately paying yourself a salary for 10 years? That makes the target variable, as we all earn different amounts and have distinct spending habits. But it also helps us make the journey more meaningful to our current financial situation and the plans we have in store for the future.

So, to get the ball rolling, let’s say we want to recreate the average gross UK salary of £39,039 for a decade - maybe as a bridge between work and our pension kicking in, or alongside it, or even as a way of winding down the day job with enough ballast to kick off a side project.

We’ll get into scenario planning and if it’s even feasible but, before that, a few caveats for the projections we’re about to make:

1. We all have our own savings goals, expenses and abilities to invest regularly - you need to make the maths work for you. After all, that’s the point here, as opposed to just pointing at the £1m ISA and saying “crack on”. In short, this might be a useful thought experiment but it is most certainly not a personal recommendation.
2. You might not want to deplete your ISA savings right before retirement - it may not make sense for you tax-wise. Again, take a step back and factor in your own situation. Robinhood doesn’t provide tax advice. You should seek advice if you have any questions regarding the impact your investments will have on your income tax and tax filing requirements.
3. We aren’t swapping like-for-like situations as the average UK salary is a gross amount and ISA withdrawals will be tax free. Also, while you’ve previously set aside money to put into your ISA, while you’re using it you aren’t contributing to it, so you’re dampening the compounding effect. You also may still want to contribute to your pension.
4. Inflation will nibble away at the value of what we can buy in the shops so the average salary now likely won’t look as impressive in 30 years.
5. Returns aren’t uniform. However useful, illustrations and examples are just that and average annual returns don’t show the natural volatility of the stock market.

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With the ground work firmly laid, let’s turn our attention to what it takes to recreate the average gross UK salary of £39,039 every year for 10 years. We’ll use four levels of monthly investments in our planning to model different abilities to invest - this will have a knock-on effect on the length of time it takes to get to a sum that would then fund the next decade.

A 7% average annual return rate, compounded once per year, is in line with the historical annual return rate of the S&P 500 so we’ll use that, in the knowledge that it will naturally change from year to year. We’ll also assume that, once we reach an amount that could mimic the average salary, we stay invested while we make monthly withdrawals, again achieving 7% each year. So, where does all that leave us?

First things first, it’s mathematically possible. The blend of contributions, stock market returns, time in the market and the resultant snowball effect of compounding mean we aren’t simply stockpiling cash, we’re giving it the chance to grow. Not only that but, even when we’re taking a monthly income from the pot, the rest of our money is still working for us in the background - effectively extending its life further than would be achieved by simply cutting off growth and steadily chopping the whole thing down.

That we’re exploring these hypothetical journeys through the lens of a stocks & shares ISA is an important factor in the maths too. That’s because any investment growth or dividends you generate won’t attract UK investment taxes throughout the journey or when it comes to withdrawing your cash. No UK capital gains tax (CGT), no UK dividend tax and none of the admin to think about either. Considering there’s a £3,000 capital gains allowance and £500 dividend allowance in the current tax year and the next one, our investors would likely have to factor UK investment tax into their calculations if they weren’t investing in a tax-efficient account like a stocks & shares ISA.

Whether this all fits into your ability to invest monthly or even chimes with your needs later on is very much a personal takeaway. But, exact numbers aside, it makes me curious as to how I could refine each part of the equation to make it quite a bit more personal. It certainly connects me more to the idea of investing for the future than the proverbial million-pound ISA.

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If freedom is more about flexibility to you, you might want to reduce your hours, go part-time, take longer holidays, only take on the projects you fancy or give yourself more time to explore hobbies or side quests.

If that’s the case, you might not need to recreate that full salary, just part of it. Let’s see what it would take to generate a £20,000 income for those 10 years.

Again, it looks achievable in our hypothetical world where returns are consistent and nothing gets in the way of our investing. But, even if we put the calculator down and take a step back, the fact that it’s possible without having to hit the magical million could ultimately make the whole pursuit more attractive to investors of all levels. Yes, the money runs out sooner in comparison but getting there in the first place is paramount, and on that measure arguably this approach wins the realism contest.

And even if you have no intention of funding a 10-year food truck venture or decade-long silent retreat, for me this exercise offers a few clear takeaways:

1. While there’s nothing wrong with championing the journey towards becoming an ISA millionaire, it’s not the only game in town. Giving yourself anything from a bit of breathing room right up to 10 years of financial freedom or flexibility is as good a goal as any and might not require making a million in the process. Make your stocks & shares ISA work for you and your financial goals rather than targeting a random benchmark.
2. A lot of the investment guidance out there focuses on building a pot and only gleaning either the natural income or the capital growth. It makes sense to avoid eroding the pot if longevity is the ultimate aim. If it isn’t, it may be helpful to tap into the underlying principal, with a mix of capital growth and income still helping in the background.
3. You don’t need to be rich to get started. Some people will be able to fill up their ISAs, some won’t - whatever your means, the beauty of investing over time means that consistent ISA contributions still have the potential to benefit from compounding. Harnessing that most basic principle of investing is open to all of us, regardless of how much we have to invest.
4. The longer the journey and the more rigid our goals are, the more we need to keep an eye on any drag on the performance of our stocks & shares ISAs. The last thing we want is for high charges to be consistently scuppering any positive returns we’re making over time. That means honing in on fees. The Robinhood stocks & shares ISA could look attractive here, with its low FX fees and no commission or account fees. ISA, tax rules and T&Cs apply.

Discrete calendar year performance

As at 17 March 2026. Source: FE Fundinfo. In GBP. Past performance is not a reliable guide to future results.

Important information

When investing, your capital is at risk. The value of your investments, and the income you receive from them, can go down as well as up and you may get back less than you invest. Forecasts aren’t a reliable guide to future results or returns.

Make sure to do your own research on what investments are right for you before investing or consider seeking expert financial advice. Please note that this article is meant for information and does not constitute any financial advice. This is not an offer, recommendation, inducement or invitation to buy, sell, or hold any securities, or to engage in any investment activity or strategy.

Robinhood doesn’t provide tax advice. You should seek advice if you have any questions regarding the impact your investments will have on your income tax and tax filing requirements.