What a £20k Stocks and Shares ISA Delivered Over the Past Year

A £20k Stocks and Shares ISA invested in a FTSE 100 index tracker twelve months ago would be worth around £24,200 today, before charges, following a 21% rise in the index over that period. That is a reasonable return by any historical standard, and it sets a useful baseline for thinking about what individual stock selection can add — or subtract.

What a £20k Stocks and Shares ISA Returned Last Year

The FTSE 100’s 21% gain over the past year is the headline, but the income component matters too. The index currently offers a dividend yield of around 3.1%, and at the lower price levels of twelve months ago the yield was higher. On a £20,000 starting position, that translates to roughly £740 in annual dividends on top of the capital gain. For a long-term investor reinvesting those distributions, the compounding effect over a decade is where the real difference is made.

Charges erode that picture somewhat, which is why the choice of ISA wrapper and platform matters. A passive index fund held inside a low-cost ISA is the baseline; anything more active carries higher costs that need to be justified by outperformance.

The past year also serves as a reminder that results are not linear. The FTSE 100 spent much of early 2025 absorbing the shock of US tariff announcements before recovering. An investor who checked their balance at the wrong moment might have been tempted to sell. The £24,200 outcome only materialises if the position was held.

Greggs: A Case Study in Picking Individual Shares

The alternative to index tracking is buying individual companies, and the results can diverge sharply in either direction. Greggs (GRG:LSE) illustrates both the appeal and the difficulty of that approach.

The shares sit around 8% below where they stood a year ago, underperforming the index by nearly 30 percentage points. That gap is not explained by weak trading at the top line. Greggs’ preliminary results for 2024 showed total sales of £2,014m, up 11.3% year-on-year, with like-for-like sales in company-managed shops up 5.5%. The ordinary dividend reached 69.0p per share for the year, also up 11.3%, in line with underlying diluted earnings per share growth.

The market’s scepticism is concentrated on margins and demand consistency, not revenue momentum.

The Delivery Channel and the Heatwave Risk

One area of genuine operational progress is delivery. Greggs expanded the number of shops offering delivery to 1,556 in 2024, up from 1,440 in 2023, with delivery sales rising 30.9% over the year and representing 6.7% of company-managed shop sales, against 5.6% the prior year. That channel diversification reduces the business’s dependence on foot traffic through any single format.

But the heatwave risk is real and recurring. An unexpected profit warning issued last summer unsettled investors by pointing to hot weather dampening sales, raising questions about demand planning. The pattern has now repeated: on 2 July 2025, Greggs issued a further profit warning, stating that full-year operating profit could be modestly below the 2024 level, with the first half expected to come in lower than last year when interim results are published on 29 July. Like-for-like sales in June 2025 were impacted by very high temperatures.

British Baker reported the warning as a direct consequence of the current-year heatwave, separate from the 2024 summer episode. Two profit warnings in successive summers on the same cause is the kind of pattern that markets price in structurally, not as a one-off.

Early 2025 trading was steadier: like-for-like sales in company-managed shops rose 1.7% year-on-year in the first nine weeks of the year. The longer-term expansion thesis, centred on growing the UK shop estate and cementing Greggs’ position in the convenience food market, remains intact on paper. Whether the unit economics justify the ambition is the question the next set of results must answer.

For the £20k Stocks and Shares ISA investor, the Greggs example is instructive rather than discouraging. A diversified portfolio of individual shares could have outpaced the FTSE 100’s 21% return over the past year; it could equally have lagged it. Concentration risk is the mechanism that produces both outcomes. The index eliminates that risk by spreading it across 100 companies, at the cost of capping the upside from any single winner.

The next test for anyone holding Greggs is the interim results on 29 July. If the profit warning proves conservative and margin pressure is contained, the share’s current discount to its long-run valuation range starts to look like an entry point. If the heat-driven demand softness is structural rather than seasonal, the setup looks different. Greggs’ investor relations page will carry the full statement when it lands.