I good savings account returns 7 – 8% these days, is it potentially much more from shares in some of the big blue chip companies?
With interest rates falling, I'm not sure where you are getting 7 to 8% from a savings account; money market fund sponsors are having to bail out their funds now for having invested them in synthetic securities like SIVs. You cannot count on "income" over the long haul.
You get returns that beat inflation not from income/dividends but capital appreciation — the rewards of a growing economy and companies that participate in that economy.
Yes, the long term average for big-company stocks is roughly 10%, or roughly 7% inflation adjusted, but the market RARELY returns 10% in any given year — it is usually much higher or lower. So you have to be prepared for those fluctuations. Somewhere between 60% and 80% of an individual company's stock return is the result of the market and sector the company is in. In other words, you can get almost the same return from a basket of stocks as you can from an individual stock, but with much lower risk (smaller fluctuations in price). So investigate an exchange traded fund (ETF), index funds that now slice and dice the market in very interesting and advantageous ways.