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Dividend reinvestment (DRIP) projector

Two income lines, one decision: every reinvested payment buys shares that themselves pay dividends. See what that loop does to your income over decades.

Invested today£20,000

Adding per month£200/mo

Starting dividend yield3.5%

A very high starting yield is often the market pricing a cut; 2 to 4.5% with growth is the durable zone.

Dividend growth per year5%

Price growth per year4%

Years20

Income/yr (reinvested)

£8,247

Income/yr (taken as cash)

£4,769

Pot (reinvested)

£212,884

Pot (income taken)

£118,149

Annual income, reinvesting Annual income, taking the cash20 years

The gap between those income lines is reinvestment doing its quiet work: every reinvested payment buys shares that themselves pay dividends. The strategy in one line: reinvest everything while you accumulate, flip the switch to income the day you need it. Inside an ISA the whole loop runs tax-free. These are projections on smooth assumptions; real dividends arrive lumpy and occasionally get cut.

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Both income lines and both pots, saved.

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Educational information, not financial advice. Figures current as of July 2026 where dated; allowances and rates change, so check the source before acting.