Being able to sit back and enjoy a steady monthly passive income might seem like a distant dream. But by using the advantages of a Stocks and Shares ISA, it’s something ordinary private investors like you and I can realistically target — we really can.

And why stop at £1,000 a month? According to the latest government data, there are more than 5,000 ISA millionaires in the UK. To achieve that much, you need to be a financial whizzkid, right? Well, we don’t have a demographic breakdown — but I’d wager many of those are ordinary hard-working folk like the rest of us. They just have patience and a long-term commitment.

To make things sweeter, even investors with multi-million pound ISAs still don’t have to pay any tax on any money they take out. Not a penny.

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.

So how much then?

My £1,000 monthly passive income target comes to £12,000 a year. How much I need in my ISA to earn that much depends — perhaps obviously — on the rate of return I can get from my investments.

Over the past 20 years, the average annual FTSE 100 return has come in at 6.9%. For a rate like that to get me to my annual £12,000, I’d need a pot close to £175,000. If I could invest half an ISA allowance, or £10,000, every year, and I reinvest all my dividends — I could realistically hope to get there in only around 12 years.

It all depends on how much an individual can invest, their returns, and their investing horizon. But anyone with a couple of decades of work and investment still ahead of them should be able to achieve something worthwhile.

Getting there quicker

What about bigger dividends? I have my eye on Greencoat UK Wind (LSE: UKW), with a huge forecast 11.1%. Now, some cautions right away. Firstly, a dividend can’t be guaranteed, so I’d never automatically assume I was going to get it. And the big yield is partly because the Greencoat share price has been sliding for the past few years — it’s down 29% over five years. Maybe it’ll fall further.

And there’s no profit expected for the 2025 year just ended — eyes peeled for results due 26 February.

Still, forecasts expect profit in 2026 and beyond, enough to cover the dividend comfortably. And reporting on the first half in July, the company said its “aim is to provide investors with an annual dividend that increases in line with RPI inflation“.

Sentiment swings in favour and against renewable energy is another uncertainty for investors to cope with. But if the dividend goals are achieved…

Bet on the big ones?

Am I saying we should go all-in on the biggest dividends in the hope of maximising our passive income potential? Nope, absolutely not. There’s way too much danger in that.

But can we aim to lift our potential returns by putting a proportionate amount of our investment money into high-yield stocks, as part of a well-diversified Stocks and Shares ISA? That’s a big yes for me. Greencoat’s on my ISA candidate’s shortlist.