Here’s 1 tip anyone can use to invest £237 a month in a Stocks and Shares ISA

Will the 2020s be the year Britons wake up to the Stocks and Shares ISA? The latest data shows only one in six UK residents have opened one of these wealth-building accounts, but the signs are that attitudes might be shifting.

For one thing, we’re saving more. In the 2010s, the average savings rate of income was around 5%. But the equivalent rate for 2020-2025 has hovered between 10% and 11%. Folks are saving double what they did (in percentage terms) a decade ago!

Let’s say we squirrel away this higher rate of saving in a Stocks and Shares ISA What could it turn into? Let’s use 10% of the average wage in 2026 which – by my calculation and after tax – comes out to £237 a month.

Making moves

Before working out the details of what happens to our monthly £237, we must understand that nothing happens on its own. We need to make investments with the money in the ISA.

One popular piece of advice is to ‘buy what you know’. We all interact with dozens of companies on a daily basis. So why not use that base level of knowledge to help pick the firms that are doing it right rather than those that are doing it wrong.

As someone who’s a big reader and video game player, I can tell that the products of Games Workshop (LSE: GAW) have a cult following like little else. By tapping into what I know, I felt confident enough to buy the shares a while back. They’ve doubled in value since 2022 and the company is now listed on the FTSE 100.

An important counterpoint is that research is needed beyond just liking a company’s products. In Games Workshop’s case, the rising costs of wages, raw materials and general manufacturing aren’t something that you’ll gather from just walking into a Warhammer store. And because all the factories are UK-based, this could be a risk in the future.

Like many attractive growth shares, Games Workshop shares command a premium. Would-be investors are paying around 26 times earnings at the moment. Even so, I think they’re worth considering for a Stocks and Shares ISA.

Amazing things

Let’s circle back to that £237. What happens to it over time? Well, I’ll apply a 10% yearly rate of return. That’s a lot lower than fast-growing shares like Games Workshop have achieved over the years, but it’s closer to the average.

The key is to give it enough time to let the compound interest start working its magic. On an investing timeline of 30 years, we can see some amazing things.

The best thing? Because £237 a month is under the deposit limits, we get all the tax advantages of investing through a Stocks and Shares ISA. In other words, any income withdrawn from that half a million won’t pay a penny to the taxman.

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.

A 30-year period of £237 a month leads to a total amount saved of £85,320. That’s a nice chunk of cash all by itself. But applying our 10% rate of return and we now have £492,792. Investing through our tax-free ISA has given us back around six times what we put in!