How a lot would an investor want in Aviva shares for a £147 month-to-month passive revenue? – Imperial Wire

Aviva (LSE:AV.) shares have been a breath of contemporary air in my portfolio since I purchased them in late 2023 at 413p apiece. Not solely have they appreciated in worth to 644p, they’ve additionally pumped out pretty rising dividends.

However I used to be questioning lately what number of Aviva shares it could take to pay for the common month-to-month power invoice. In keeping with EDF Vitality, that is at the moment £147 for a medium-sized family.

Let’s take a more in-depth have a look at this FTSE 100 insurance coverage inventory to seek out out.

Robust efficiency

After greater than a decade within the wilderness following the monetary disaster, Aviva inventory has burst again into life lately. Underneath CEO Amanda Blanc, the insurer has exited almost all worldwide markets to deal with extra worthwhile companies within the UK, Eire, and Canada.

Importantly, Aviva has pivoted in the direction of wealth administration and normal insurance coverage within the UK — merchandise that require much less money sitting on the stability sheet than life insurance coverage. This asset-light technique has been paying dividends, fairly actually. 

We’re accelerating our progress in capital-light areas, according to our technique, and now count on our enterprise to be over 75% capital-light by the tip of 2028. That is excellent news for shareholders, as we ship stronger progress and higher returns, utilizing much less capital. The outlook for Aviva has by no means been higher.
CEO Amanda Blanc, Q3 2025

In Q3, normal insurance coverage premiums rose 12% to £10bn, whereas its wealth enterprise secured internet flows of £8.3bn, bringing property to £224bn. Within the UK, there was a 24% leap in private traces (motor, residence, journey insurance coverage, and so forth), which largely mirrored Aviva’s £3.7bn acquisition of Direct Line.

Encouragingly, Direct Line’s £100m cost-cutting plan was completed three months early, and Aviva is now concentrating on £225m of extra synergies by 2028. The mixed companies varieties the UK’s largest motor and residential insurer.

Passive revenue plan

Turning to revenue, the newest 12-month forecast places Aviva’s forward-looking dividend yield at a really respectable 6.4%. This represents a FY25 last dividend in Might and a FY26 interim dividend anticipated round October.

So, to earn £147 per 30 days — the equal of £1,764 per yr — to pay for an power invoice, an investor would wish to unfold these two funds out throughout the yr. The shares would price round £27,000 at at present’s market worth.

Naturally, that’s an unaffordable sum for most individuals. Nonetheless, it’s doable to construct in the direction of it by investing, say, £600 per 30 days in Aviva shares.

On this situation, it could take slightly below three and a half years to build up sufficient shares to pay £1,764 in annual dividends. This assumes payouts are reinvested throughout this era somewhat than spent.

Sadly, UK power payments will in all probability be increased in three years’ time, however hopefully Aviva’s dividend will rise to offset that.

For simplicity’s sake, I’ve additionally assumed a secure share worth throughout this era, which is unlikely (ideally, it should rise).

Diversification

No inventory is risk-free, in fact, and Aviva might underperform if the UK financial system hits the rocks over the following couple of years. This may see shoppers cancel sure insurance coverage insurance policies.

Additionally, it could be finest to not put all eggs in a single Aviva-shaped basket. However as a part of a diversified high-yield ISA portfolio, I feel this FTSE 100 inventory is nicely price contemplating at present.