That might sound sensational. But new research today (3 June) shows how just relying on the State Pension can cause a huge cash shortfall in later life.

What did it say?

Chilling data

Pensions UK is a trade body representing workplace pension schemes and providers. It found that just 9% of the working population can expect a ‘comfortable’ standard of living in retirement.

It found that a comfortable lifestyle costs £45,400 a year for one person, and £62,700 for a two-person household.

The organisation said its data reflects “increased everyday costs across spending categories such as food, essential household bills and transport, as well as the social activities and hobbies“.

It gets worse…

That 9% figure is a pretty sobering figure. Yet Pensions UK wasn’t done yet. Its research also showed just 23% of workers were on course for a ‘moderate’ lifestyle. This costs £32,700 for one person and £45,400 for two people.

To top things off, the association said millions might not even achieve a ‘minimum’ standard of living. It noted that 82% of workers are on course to hit this threshold, which amounts to £13,900 for one individual and £22,500 for two.

Zoe Alexander, Pensions UK’s executive director of policy and advocacy, said that

Without action, too many risk facing a cliff-edge drop in income when they stop work.

So what can we do about it? The solution may be close at hand.

Taking action

The long-term power of the stock market means everyday investors can realistically build wealth that transforms their retirement. Products like the Stocks and Shares ISA make it even easier to target life-changing wealth.

What’s more, these products protect investors from taxes on capital gains and dividends, giving us more money to build our portfolios.

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.

The average annual return from share investing is 9% over the long term. If someone can hit that figure by investing roughly £350 a month, they’d have an ISA worth £650,000 after 30 years.

This could then provide them with £45,500 passive income each year if invested in 7%-yielding shares.

An 8% income opportunity?

Legal & General (LSE:LGEN) is a UK dividend share I personally own. I reinvest any income today to grow my portfolio. When I retire, I plan to use its dividends to fund my lifestyle.

Dividends are never guaranteed. And in the future, payouts from this FTSE 100 share could be impacted by rising competition or changing regulations. Yet, I’m confident it can continue paying an enormous and reliable passive income, underpinned by its leading positions in booming financial services segments (like pensions and asset management).

Legal & General shares have delivered a growing dividend in 13 of the last 14 years. And in that time it’s yield has averaged above an impressive 8%. UK shares like this are a great way to target a comfortable retirement, in my view.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Royston Wild owns shares in Legal & General.

The post Just 9% of us can expect a ‘comfortable’ retirement! Could UK shares be the answer? appeared first on The Twelfth Magpie.

Can Legal & General Group shares grow?

It’s hard to write about UK dividend stocks without mentioning Legal & General Group (LSE: LGEN), which boasts a bumper trailing yield of 8.08%. Sadly, the share price has less to recommend it. It’s been pretty flat for years. What’s the issue here?

Legal & General’s profits have been pretty up and down over the last few years. That’s down to volatile markets, rising interest rates, and restructuring costs as the board works to sharpen up the group and free up some capital.

Investors may have to be patient here, But while they wait for growth, the income should continue to flow. The board is pressing on with plans to pay loyal shareholders £5bn via both dividends and share buybacks. Legal & General is worth considering for income. The growth could take longer.

Is Land Securities Group right for you?

Commercial property specialist Land Securities Group (LSE: LAND), also known as Landsec, owns a spread of UK offices, shopping centres, and retail parks. It generates rental income from tenants and capital growth from property sales.

Landsec is structured as a real estate investment trust (REIT), which escape corporation tax if they distribute at least 90% of rental profits to shareholders. They tend to have chunky yields as a result and that’s the case here. The trailing yield is a mighty 6.45%.

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.

Again, the shares have been flat lately, so Landsec will likely appeal more to income seekers than growth investors.

Its retail centres have been threatened by e-commerce, while the working-from-home trend hit office demand. However, Landsec doesn’t have any trouble finding tenants, as its occupancy rate just hit a 20-year high. Its shares look cheap trading at just 12 times earnings. When the UK economy finally recovers, the Landsec share price could finally kick on. Sadly, we’re not there yet.

Can Barratt Redrow build up from here?

It’s been a tough few years for residential housebuilders. The biggest builder of the lot, Barratt Redrow (LSE: BTRW), hasn’t escaped unscathed. Its shares are down 65% over five years.

Higher building costs and employment taxes have driven up costs, while rising mortgage rates, the stuttering UK economy, and end of the help to buy scheme in 2023 squeezed demand. This year looked promising before the Iran war hit.

As the shares have fallen, the yield has climbed to 6.45%. However, Barratt Redrow trimmed it recently, and the forecast yield is lower at 5.7%. The shares are cheap, though, at just 10 times earnings. Investors need to be brave and patient. It could be a while before the housing market really kicks on.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Harvey Jones owns shares in Legal & General Group.

The post 3 passive income shares to consider buying for a 7% yield appeared first on The Twelfth Magpie.

One answer is to save under your own steam, and the Stocks and Shares ISA is a brilliant way to do it. Every UK adult can invest up to £20,000 a year, and take all of their capital gains and dividend income free for life. Some may like to combine it with the lesser-known Self-Invested Personal Pension (SIPP).

So how big should my ISA be?

Let’s say an ISA investor wanted to boost their retirement prospects by earning another £12,547 a year on top of their State Pension. That would lift their total income from those two sources to £25,094. That’s a bit more like it.

How much capital they’d need to generate that depends on the yield from their ISA:

• At 4% they’d need £313,675.
• At 5% they’d need £250,940.
• At 6% they’d need £209,117.

A popular way to generate that kind of income is to build a spread of high-yielding FTSE 100 shares. Today, the highest yield on the entire blue-chip index comes courtesy of insurer and asset manager Legal & General Group (LSE: LGEN). It’s currently a stunning 8.08%.

Somebody who wanted to generate £12,547 a year of dividends from this stock alone only needs to invest £155,285. But I wouldn’t suggest doing that.

Investing in shares can be risky, particularly if you buy individual stocks. But you can minimise that risk by investing in a spread of different shares. I’d aim for at least a dozen, ideally more.

Is this FTSE 100 income stock for me?

Legal & General might be an interesting place to start, given the income. But every stock comes with risks attached. This stock comes with a brilliant income, but the share price has struggled.

It’s up just 6% in the last year and has fallen slightly over five years. While dividends will compensate for that, at some point investors will want to get growth on top. Can Legal & General deliver?

It operates in a competitive sector, where FTSE 100 rivals like Aviva are battling for the same business. Profits have been bumpy lately. They climbed 6% to £1.62bn in full-year 2025. That’s OK, but slightly lower than expected. A broader worry is that a stock market crash could hit fee income. Legal & General has £1.2trn under investment.

Investing is cyclical, and at some point I think Legal & General shares will kick on. While we wait, the board plans to reward loyal shareholders by paying them a total of £5bn between 2025 and 2027, through both dividends and share buybacks.

I think Legal & General’s worth considering for income seekers, but investors should also balance it with stocks that have stronger growth prospects too. I can see plenty of exciting opportunities on the FTSE 100 right now.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Harvey Jones owns shares in Legal & General Group. 

The post How much would you need in an ISA to match the new State Pension and get another £12,547 a year? appeared first on The Twelfth Magpie.

Those figures describe Legal & General (LSE: LGEN). And it’s been one of the most popular UK SIPP and ISA buys over the past few months.

Legal & General was one of the most bought stocks at interactive investor — owned by Aberdeen — in April. And that continued into May. It’s also been a top pick at AJ Bell all year so far. On both platforms, it’s vied for investors’ cash with the likes of Rolls-Royce Holdings and Lloyds Banking Group.

Why is it popular?

SIPP investors are aiming to build up a decent bit of retirement income. And a cash-generating, high-dividend, stock like this can potentially help toward that goal.

Those annual dividends need to be reinvested every year to maximise returns. But it’s surprising just how much difference compounding can make. The following table shows how £500 a month invested in Legal & General shares might grow over different timescales.

Now, I’d never suggest putting all your money in one stock. That’s just asking for trouble if it, or its sector, has a tough time. And no company can guarantee its dividend. But diversification can provide some important safety to help with both those concerns.

And, of course, different investors can afford to put away different regular amounts. But I think that table shows the magic that time can conjure, however much you can manage to invest for your old age.

And isn’t it stunning the way starting 10 years earlier could add nearly a million pounds to the pot?

What to do now?

Here’s one of the key risks. Forecasts show Legal & General’s earnings per share falling back a bit in the next few years. And it could push the P/E up to 11.5 by 2027. That might look fine by long-term FTSE 100 averages. But the insurance sector has a very cyclical history. And what might look cheap for other businesses might not be here.

Still, analysts do expect the dividend to keep rising — modestly, but steadily.

If I invested for the short term, I very much doubt I’d touch any stock in this sector. Fortunately, I’m a long-term investor and always have been. But there’s still risk, I’d say mainly from economic cycles, with a company like this.

So will I buy Legal & General shares? No, but only because I already hold Aviva — and one FTSE 100 insurer is enough for me right now. If I didn’t hold Aviva, would I consider Legal & General? Definitely. Should SIPP investors consider it? I reckon they could do a lot worse.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Alan Oscroft owns shares in Aviva and Lloyds Banking Group.

The post Here’s why Legal & General is still one of the UK’s most popular SIPP buys appeared first on The Twelfth Magpie.

The company’s payout record over the last decade alone speaks for itself. In the years since 2016, the company’s dividend yield has averaged a stunning 8.1%. That’s more than double the FTSE 100 long-term average of 3%-4%.

Average annual growth of 5% has also helped investors grow their income ahead of inflation. Dividends have grown every year, the only exception being in 2020 when it froze the annual payout:

Past performance isn’t always a reliable guide to future returns though. So the question is: can Legal & General shares keep delivering market-beating, growing dividends?

Strong dividend culture

I’m confident they can. As that record shows, management’s committed to paying large and progressive dividends, and has vowed to keep this going until 2027 at least.

Its current capital allocation policy is to return £5bn to shareholders through dividends and share buybacks for 2025-2027. This includes raising dividends by 2% a year over the period.

That’s all well and good, you might say. But if another shock comes along, how well placed will Legal & General be to meet its pledge? On the basis of its enormous cash flows and huge capital reserves, I’m pretty relaxed.

Its Solvency II ratio has fallen recently, but at 210% as of December, it remained more than double what regulators require. Legal & General is also confident it can retain a strong balance sheet, saying its medium-term target operating range for Solvency II coverage is 160%-190%.

Cash machine

Legal & General is a cash machine, thanks to the regular policy premiums and product service fees it receives. And unlike many other dividend-paying shares, its operations are extremely ‘capital light’, so it can distribute more of this cash to shareholders if it sees fit.

Encouragingly for dividend investors, the firm’s simplification plan — which includes merging divisions and growing its fee-based businesses — is further strengthening its capital efficiency. It’s the reason why it has those impressive Solvency II targets.

This sets the company up well for the longer term. Other reasons I’m excited about future dividends is the firm’s market-leading position in segments enjoying exponential growth (including pension risk transfer — or PRT — and asset management). Its diversified model across product lines and different regions also underpins reliable dividends.

The best dividend stock out there?

Buying any stock for dividends comes with risk. And in the case of Legal & General, payouts could underwhelm further out if competitive pressures rise, putting revenues and margins under strain. There’s also the possibility dividend growth could be impacted during economic downturns.

Yet I’m still convinced Legal & General’s one of the FTSE 100’s best dividend shares to consider.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Royston Wild owns shares in Legal & General.

The post How have Legal & General shares become a dividend powerhouse? 5 reasons why! appeared first on The Twelfth Magpie.

It’s important, though, to hold a diversified range of dividend stocks to balance risk and deliver a reliable long-term income. But what could a diversified portfolio look like?

I think holding a portfolio of 20+ different shares, investment trusts and exchange-traded funds (ETFs) is a top strategy to consider. It could potentially contain the following three dividend heroes: Greencoat UK Wind, Supermarket Income REIT and Legal & General (LSE:LGEN).

If broker forecasts are accurate, a £20,000 Stocks and Shares ISA investment spread equally among these three companies will deliver a £1,840 second income this year alone. As a results I think all three are worth further research.

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.

Why Legal & General shares?

Legal & General is one of the FTSE 100‘s hottest dividend shares. It’s forward dividend yield is 9.1%, and it’s raised annual payouts every year since 2010 bar one.

What’s its secret? It mainly comes down to three things:

• Enormous scale and diversification across product areas.
• Strong cash generation and high capital reserves.
• Commitment to returning excess capital through share buybacks and dividends.

Legal & General also benefits from a market-leading brand and steady market growth. Amid an ageing global population and rising interest in financial planning, demand for its pensions, investment and other products is heading northwards. I’m optimistic this will continue, even though market competition is growing and with it pressure on sales and margins.

A great REIT

Real estate investment trusts (REITs) can be ideal stocks for targeting a second income. Sector rules state 90% or more of rental earnings each year must be distributed to shareholders.

Supermarket Income’s one trust with a better dividend record than most. Why? It also focuses on the highly stable food retail market, and its supermarket properties are let out to blue-chip operators including FTSE 100 firms Tesco and Sainsbury’s.

The result is consistent dividend growth since it listed on London’s stock market in 2019. For this year, it packs an enormous 7.8% dividend yield. But I’m mindful that future dividend growth could be impacted by interest rate rises denting earnings.

A 10.6% income opportunity?

Greencoat UK Wind is another classic safe-haven dividend stock. As its name implies, it operates in the renewable energy space, where demand for its services remains largely unchanged over time.

There are other advantages too, including inflation-linked contracts and long-term offtake agreements with power suppliers. As a consequence, dividends have risen here for 12 of the last 13 years. It also means a juicy 10.6% dividend yield for 2026.

Like any dividend share, there are risks involved. If wind speeds slow down, the amount of profits Greencoat UK makes could slump as power generation drops. That said, the company’s UK-wide portfolio helps spread this risk, resulting in that excellent dividend growth record.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Royston Wild owns shares in Legal & General.

The post These 3 shares could deliver a £1,840 second income in an ISA overnight! appeared first on The Twelfth Magpie.

But focusing only on income may miss a broader shift taking place beneath the surface. As the business evolves, the investment case increasingly appears to be tied to something larger than yield alone.

The retirement engine

One part of the business may explain why the investment case is broader than dividend yield alone — pension risk transfer (PRT).

This is where companies transfer pension liabilities to insurers, providing greater certainty for schemes while creating long-term retirement assets.

The group has become a global leader here. In 2025, Institutional Retirement wrote £11.8bn of PRT business across the UK, US, and Canada, completing 63 schemes.

The scale is significant. Recent deals included a £4.6bn buy-in with Ford pension schemes and a £1.6bn transaction with the BP Pension Fund.

What stands out is that this business benefits from more than underwriting expertise alone.

Many schemes already sit within its wider asset management ecosystem, creating relationships that can later support retirement solutions. In the UK, 34 of the 45 schemes completed last year involved existing Asset Management clients.

That creates an advantage that may be difficult to replicate.

The important point is that demand here is not simply tied to market sentiment. As defined benefit schemes mature and seek certainty, PRT increasingly looks like a structural growth market rather than a cyclical opportunity.

But if PRT is becoming a powerful growth engine, what enables it to compete so effectively at scale?

The private markets advantage

Part of the answer lies in what sits behind these retirement solutions.

Private markets are becoming increasingly important.

Exposure to infrastructure, housing, and private credit now supports both pension transactions and broader asset management ambitions. Its Private Markets Access Fund reached £2.5bn in assets after launching in 2024, helping defined contribution savers access private assets.

That matters because the industry itself is shifting. Last year, defined contribution revenue exceeded defined benefit revenue for the first time.

Partnerships are also strengthening this model. A recent collaboration with Blackstone combines private credit and fixed-income expertise, supporting expansion into wealth and institutional markets while reinforcing annuity capabilities.

To me, this looks less like a traditional insurer and more like a retirement and investment platform positioned for long-term structural demand.

What could go wrong?

While the long-term story is appealing, this is still a business exposed to financial markets and economic conditions.

Investment volatility, weaker growth, or widening credit spreads can affect asset values and profitability, particularly across property and fixed income markets. Geopolitical tensions and policy uncertainty also continue to cloud the broader outlook.

Private markets deserve monitoring too. Although exposure remains largely investment grade and direct lending exposure is limited, periods of economic stress can pressure valuations and credit quality.

Management actively manages these risks through diversification, credit controls, and hedging where appropriate. But for investors, this remains a stock where market conditions and sentiment can still influence performance over shorter periods.

Despite the risks, the broader perspective for the stock remains positive for me. The shares may still attract attention for their yield, but the longer-term story increasingly looks tied to retirement, private markets, and structural demand. For investors willing to look beyond income alone, this remains one worth considering.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Andrew Mackie owns shares in  Legal & General.

The post At 8.1%, are investors missing the bigger story behind Legal & General shares? appeared first on The Twelfth Magpie.

Ultra-high yields like this one are supremely tempting. At today’s rate, Legal & General would double your money in nine years, even if the stock remains rooted to the ground. If the board increases the dividend per share every year, you’ll get there faster.

Unfortunately, high yields are often a sign of a struggling share price. And to a degree, that’s what’s happening here.

Why is L&G’s income so high today?

The Legal & General share price performance has been pretty pathetic. At 269p, it’s trading at similar levels to late 2014, almost 12 years ago. Investors will have bagged a whole heap of dividends, but do they make up for the lack of growth? Not really.

Ideally, dividend stocks will deliver both, to help your total return compound and grow. On the other hand, recent underperformance does offer investors an opportunity. That’s because if Legal & General can get its act together, investors could get growth and income in spades.

Legal & General’s sector rival Aviva shows what can be done. Its shares are up more than 50% in the last five years, and it still bosts a 6.4% trailing yield. So why has Legal & General lagged? A quick skim of recent pre-tax profits should give you a rough idea.

• 2025 – £1.623bn
• 2024 – £1.616bn
• 2023 – £1.667bn
• 2022 – £2.517bn
• 2021 – £2.265bn

Ultimately, share prices follow profits. As you can see, they’ve been pretty bumpy. The business has been tripped up by fluctuating interest rates and derivative revaluations, as well as restructuring costs and one-off adjustments as the board works to streamline the group and free up some capital.

There are signs of progress, with earnings per share (EPS) expected to land at the top end of the board’s three-year target of between 6% and 9%. The risk is that we get more shocks. With £1.2trn of assets under management, Legal & General would suffer in a wider stock market crash.

Can that passive income keep flowing?

In my view, shareholder payouts are sustainable. The balance sheet is strong, with a Solvency II coverage ratio of 210%. On 11 March, the board found enough cash to fund the group’s biggest ever share buyback of £1.2bn.

Legal & General has hiked shareholder payouts every year since 2010, with the sole exception of pandemic year 2020. However, the board is set to trim future hikes from 5% to just 2% a year. That’s below inflation for now.

In my view, Legal & General would have to be hit by some pretty bad news to actually cut the dividend. That’s the main reason to invest, after all. The shares may continue to struggle given today’s wider uncertainty, but I’m hoping that one day they’ll kick on. At least we’re getting lots of income while we wait. Just remember that other FTSE 100 income stocks are delivering growth, so check them out too.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Harvey Jones owns shares in Legal & General Group.

The post At 8% is this eye-popping FTSE 100 dividend yield simply too good to be true? appeared first on The Twelfth Magpie.

As has been true for years, the investment and insurance giant is throwing off one of the FTSE’s biggest dividends. But there are also huge potential price gains in sight as the market still pegs it like a low‑growth plodder. All of this is underpinned by stunning earnings growth forecasts and exceptional cash flow generation.

So what sort of returns am I looking at from another £20,000 invested in this top-tier gem?

How much dividend income’s in sight?

£20,000 in Legal & General could make me £27,118 in income from dividends alone after 10 years. And after 30 years — the end of the standard long-term investment cycle — this could rise to £241,525.

Adding in the initial £20,000 investment, the holding’s total value would be £261,525. And this would generate a yearly income of £22,491!

The numbers are based on the dividends being reinvested in the stock to utilise the turbocharging power of dividend compounding. They also factor in analysts’ forecasts of an 8.6% dividend yield by end-2028, up from the current 8.1%. This is more than double the FTSE 100 average of 3.1%, although yields can go down and up over time.

And what about price gains?

Price represents the current market consensus, while value reflects the underlying business performance and future cash flows. Recognising the gap between the two is essential for long‑term investors because market prices generally converge towards ‘fair value’ as time passes.

To estimate the fair value of any stock, discounted cash flow (DCF) analysis projects future cash flows and discounts them back to today. Where those projections are less certain, investors demand higher returns, which increases the discount applied.

Analysts’ DCF models may differ, depending on their assumptions. But based on my own framework — including a 12% discount rate — Legal & General looks 56% undervalued at its current £2.70 price.

That implies a fair value of £6.14 — more than double where it trades now. So if markets continue drifting toward fair value, this could be a great buying opportunity if those DCF assumptions prove correct.

My investment view

There are risks in any share, and Legal & General is no exception. One is a sharp downturn in financial markets that could affect the value of the assets it manages.  Another is any major regulatory change that could reduce free cash flow.

That said, analysts forecast that the firm’s earnings will grow a strong 14.5% a year to end-2028 at minimum. And it is this growth that ultimately powers share price and dividend gains over time.

This looks underestimated to me, as its 2025 results saw profit before tax soar 80% year on year to £807m.  The group also delivered £1.53bn of Solvency II operational surplus, up from £1.46bn.

Given this array of positive factors, I will buy more of the shares very soon. And other high-yielding undervalued stocks in other sectors have also caught my eye.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Simon Watkins owns shares in Legal & General.

The post I’m targeting £22,491 in dividends a year from another £20,000 in this stunning FTSE 100 income share! appeared first on The Twelfth Magpie.

By reinvesting dividends, I miss out on their short-term financial benefits.

But by reinvesting them, it helps grow the size of my ISA and so potentially setting me up for bigger passive income streams from dividends down the line.

Delayed gratification of a 9.8% yield!

To illustrate, let me use an example. Say someone has a £10k Stocks and Shares ISA and invests that in a diversified portfolio earning an average 7% dividend yield. That would earn them £700 a year of passive income.

But what if they did not take the dividends as passive income and instead reinvested (compounded) them?

Doing that, after five years the ISA ought to be worth over £14k. That should be big enough for a 7% yield to generate around £982 a year in passive income.

Setting a realistic target

Is a 7% yield achievable while managing risk? After all, high-yield shares can be a red flag that the City sees as potentially hard or impossible to sustain over the long run. Then again, no dividend is ever guaranteed to last – not even a small one.

But I think it can be achievable. In the FTSE 100, shares such as Legal & General (LSE: LGEN) and Standard Life yield 7% or greater.

Others are close to 7%, so could potentially form part of a portfolio achieving that yield on average overall. Examples include 6.6%-yielding Londonmetric Property and M&G.

But there is life outside the FTSE 100 and the FTSE 250 offering a host of shares that yield over 7% — well over in some cases.

Worth considering

As it happens, I do think Legal & General merits consideration for its long-term passive income potential.

The business often seems to be unloved by investors. The Legal & General share price has actually fallen by 5% over the past five years, a period when the wider FTSE 100 index has gained 48% in value.

But while the market may not seem that excited about the share, the dividends keep rolling.

There was one year during the pandemic when Legal & General held its dividend steady. Apart from that, it has grown the payout per share every year since making a big cut during the financial crisis.

The company aims to keep doing so despite already having the highest yield in the FTSE 100.

It has a strong brand and large customer base combined with a proven business model, meaning Legal & General is a cash generation machine.

That is good for the dividend, but one risk I see is the sale of a significant US business this year reducing recurring earnings, even though in the short term it provides a cash boost.

Still, taking the long-term view, I continue to like the passive income potential offered by Legal & General.

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Christopher Ruane has no position in any of the shares mentioned

The post Here’s how you could use a £10k Stocks and Shares ISA to try and target a £982 annual passive income appeared first on The Twelfth Magpie.