Twelfth Magpie Puts £194,425 SIPP Target on £7,777 Passive Income Goal

1 articles · Updated · twelfthmagpie.com · Aug 12

£194,425 in a SIPP would be needed to generate £7,777 a year at a 4% dividend yield, with the target falling to £155,540 at 5% and £129,617 at 6%.
The calculation leans on SIPP tax advantages: a £100 contribution costs a basic-rate taxpayer £80, or £60 for a higher-rate taxpayer after reclaiming extra relief, while 25% can later be withdrawn tax-free.
The report says investors may want a larger pension pot and to pair a SIPP with a Stocks and Shares ISA, allowing taxable pension withdrawals to be blended with tax-free ISA income in retirement.
Imperial Brands is cited as a possible income stock, offering a 6.22% yield; its shares are up 75% over five years but down 13% over the last year, and trade on a price-to-earnings ratio of 8.3.
The broader pitch is a retirement-income strategy built around diversified FTSE 100 and FTSE 250 dividend shares, while noting risks including declining smoking rates, vaping regulation and potential lawsuits.