Used properly, the Cash ISA is fab. You can get rates of up to 4% right now, and the interest is free of tax for life. It’s a brilliant home for short-term savings. But the long-term? Not so much.

Every £1 put into a Cash ISA is £1 you can’t invest in the Stocks and Shares ISA. Over time, equities will make your money work much harder.

Should I put my money in cash or shares?

Over the last decade, the average Cash ISA paid 1.21% a year, figures from advisory service Unbiased show. Best-buy rates are much higher, but they tend to slide after the first year or two. Over nine years, that would turn £9,999 into £11,142. In real terms its value will have fallen, due to inflation.

By contrast, the average Stocks and Shares ISA returned 9.64% a year. That mighty gap multiplies over the years, as this table shows.

After nine years, our Stocks and Shares ISA investor would have £22,892, double the sum from a Cash ISA. Over 27 years, they’d have £119,983, almost nine times as much.

Everybody needs a cash reserve for emergencies, but don’t overdo it. Even the government recognises that. It’s cutting the £20,000 Cash ISA contribution limit to £12,000 from April 2027, for the under-65s. It wants younger people to put more money in equities, and get richer. The Stocks and Shares ISA allowance remains at £20,000 for all.

A great way to invest is to build a balanced spread of FTSE 100 shares offering both dividend income and growth. It’s what I do. One stock that’s done brilliantly for me over the last three years is FTSE 100 wealth manager M&G (LSE: M&G).

Is this income stock for you?

Its shares have climbed 28% over the last year, but that’s only half the story. Like many top stocks, M&G pays dividends twice a year, to reward investors for their loyalty. Today, it has a fantastic trailing yield of 6.5%. That’s on top of any growth.

Since I bought this stock three years ago my shares are up 54%, but my total return is around 85% with dividends reinvested.

Of course, investing in the stock market is risky, and buying individual stocks is riskier. Markets will always be volatile. That’s the price you pay for those superior long-term returns.

M&G has specific risks. In a wider stock market crash, disillusioned customers may withdraw funds, hitting its fee income. The rise of passive ETFs threatens its active manage fund management model. If it can’t generate enough cash, that dividend will fall, and the shares will follow.

I think still think it’s well worth considering with a long-term view, but investors should balance it with other FTSE shares from different sectors and with different risk profiles. I’d much rather do that than leave my retirement savings to erode quietly in cash.

Should you invest £5,000 in M&g 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 M&g Plc made the list?

Harvey Jones owns shares in M&G

The post How much is £9,999 invested in a Cash ISA 9 years ago worth today? appeared first on The Twelfth Magpie.

One company in particular — M&G (LSE: MNG) — stands out to me for its combination of scale, stability and generous payouts. So what sort of returns am I eyeing here?

How does the growth engine look?

Attractive yields only matter if a company can keep generating the profits to support them. A risk to these for M&G is a prolonged downturn in asset markets that could squeeze fee income. Another is higher‑than‑expected outflows from its investment funds that could weaken profitability.

Nevertheless, analysts forecast M&G’s profits will grow a whopping average of 27.5% a year over the medium term at least.

In this context, its Q1 trading update of 7 May showed £0.6bn of net inflows compared to £0.1bn of net outflows in the same period last year. Meanwhile, assets under management and administration (AUMA) remained resilient at £371bn.

Stronger net inflows and steady AUMA show that more money is coming into the business and staying there. This directly supports higher fee income and underpins M&G’s improving profit profile.

Projected rising returns

Positive for shareholders like me is that the firm continues to operate a progressive dividend policy. This means the dividend is designed to rise in step with growth in earnings per share. And if earnings do dip in a given year, the payout is not automatically cut — it is held steady instead.

The policy is reflected in the firm’s rising dividend over the past few years. From 2021 to last year, the respective payouts were 18.3p, 19.6p, 19.7p, 20.1p, and 20.5p. And these generated respective average annual dividend yields of 9.2%, 10.4%, 8.9%, 10.2%, and 7.2%.

The fact that these yields dropped on occasion even as the payouts rose illustrates that returns can alter due to share price movements.

However, analysts forecast that the firm’s dividend yield will increase from the present 6.5% to 6.6% this year, 6.9% next year, and 7.1% in 2028.

How much dividend income?

Using the forecast 7.1% as an average, another £20,000 investment by me in the stock could make me £20,595 in dividends after 10 years. And after 30 years — the end of the standard long-term investment cycle — this could rise to £147,244.

The numbers also assume that the dividends are reinvested into the stock — known as dividend compounding. The process has an extraordinary turbocharging effect on dividend returns over time.

Given this, the total value of the holding after 30 years would be £167,244. And at that point, the shares would be paying me a yearly income from dividends alone of £11,874!

My investment view

Taken together, these factors make M&G a far more resilient income stock than its headline yield alone suggests.

The combination of rising profits, a progressive dividend policy and the long‑term power of compounding creates a compelling case for anyone targeting meaningful second income to consider.

And I, for one, will be buying more of the stock very soon. In addition, I also have my eye on other very high-yielding stocks in other sectors that look like bargains to me at their current prices.

Should you invest £5,000 in M&g 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 M&g Plc made the list?

Simon Watkins owns shares in M&G.

The post How much do I need to put into this FTSE 100 dividend star to target £11,874 a year in second income? appeared first on The Twelfth Magpie.

Take Tritax Big Box (LSE:BBOX) and M&G (LSE:MNG). The average yield across these cheap FTSE shares sits at 6.3%. It means a £20,000 lump sum spread across them in a Stocks and Shares ISA could generate £2,520 in dividends just this year.

Want to know why these dividend heroes deserve serious consideration? Read on.

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.

Yield AND growth

At 6.9%, M&G’s forward dividend yield is more than double the FTSE 100 average of 3.1%. Not only that, but it looks far sturdier than most other dividend-paying UK blue chips.

It’s not down to dividend cover. This is just 1.1, which leaves little room for error in case earnings are blown off course by — say — rising inflationary pressures that hit consumer spending.

No, it’s M&G’s cash-rich balance sheet that fills me with confidence. Unlike many of its market rivals, its Solvency II capital ratio is actually strengthening. And at 242% at the end of 2025, it has far more money on its balance sheet than regulators require.

That’s not to say I’m expecting earnings to fall off a cliff. It’s also important to note that dividend cover has long been weak at M&G, averaging a negative 0.5 over five years. Despite this, dividends have continued growing since the company listed on the London Stock Exchange in 2019.

If I invested £20k in M&G shares today, I’d receive a £1,380 passive income in 2026 alone if City forecasts are accurate. That’s a stunning return, I’m sure you’d agree. But I wouldn’t just buy this FTSE 100 company for passive income.

I’d prefer to spread a lump sum like this across a number of shares to spread risk. But I think M&G could be a great addition to a diversified portfolio, and especially at today’s prices. It also carries a price-to-earnings growth (PEG) ratio of 0.1.

A REIT opportunity?

Adding Tritax Big Box (LSE:BBOX) shares to a Stocks and Shares ISA could also give it added steel.

The forward dividend yield here is 5.7%, still well above the FTSE 100 average. At this rate, a £20k lum sum might generate dividends of £1,140 just this year. With Tritax shares also carrying a price-to-earnings (P/E) ratio of 7.8 times, the company offers great all-round value.

As a real estate investment trust (REIT), it’s required to pay at least 90% of annual rental profits out in dividends. This has underpinned a strong history of dividend growth. Since 2014, shareholder payouts have grown every year bar one.

So what makes the REIT such a dividend hero? It benefits from a diversified portfolio of logistics and data centres, a blue-chip tenant base, and its tenants being locked into long contracts. The weighted average unexpired lease was 10.2 times at the end of 2025.

Higher interest rates could put earnings under pressure by raising borrowing costs. While this could impact Tritax’s share price, I don’t expect this to derail the FTSE firm’s brilliant dividend record.

Should you invest £5,000 in Tritax Big Box REIT 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 Tritax Big Box REIT Plc made the list?

Royston Wild does not hold any positions in the companies mentioned.

The post These FTSE 100 shares could deliver a £2,520 ISA income in 2026 at little cost! appeared first on The Twelfth Magpie.

I don’t know about you, but I plan to enjoy my retirement after a lifetime of work. And I don’t think the State Pension alone will allow me to do that. Today the full state benefit is £12,547.60 per year, or £241.30 a week. Have plans for regular holidays, cash gifts to loved ones, or simply kicking back and relaxing? With that level of income, you can forget about it.

At the very minimum, I think Brits should aim for double that amount in retirement income. But is this a realistic target? In a tax-efficient SIPP, absolutely. In fact, history shows that with the right investment strategy it’s possible to make a far higher regular income.

Big decisions

The question is, how large will a SIPP need to be to provide a State-Pension-matching income? It depends on what you decide to do with your pension pot once you retire.

Common options include:

• Investing in property and living off the rental income.
• Drawing down a percentage of the SIPP each year.
• Rotating the portfolio into high-yield dividend shares.
• Buying an annuity policy.

Retirees often combine two or more of these strategies to fund their cost of living. But it’s not the plan I have. For me, the best option is to put my money just in large-yielding dividend shares. This way I don’t cut into the capital portfolio of my SIPP, and can still receive a generous and dependable income each year.

Building a SIPP

Let’s say an investor decides to rotate into 7%-yielding dividend stocks at retirement. If they want a £241.30 weekly second income from these to supplement the State Pension, they’ll need a portfolio worth £179,211.

That’s a very achievable goal, in my view. Why? Not only does the SIPP focus on stock market investing, whose long-term yearly return is a robust 9%. This pension product also gives investors an extra dollop of cash each month — and at the end of the tax year, too, for higher- and additional-rate taxpayers — to grow their portfolios.

Now let’s say our investor puts £500 into their SIPP each month, made up of their own contributions and that tax relief. If they can hit that 9% average annual return, they’ll have built their £179,211 SIPP in just over 14 years.

Choosing top income shares

I have the same aim. And I believe my best chance of achieving that and a £241.30 weekly passive income is with a diversified portfolio of stocks. Personally, I am aiming for 15 to 20 shares. M&G (LSE:MNG) is one I’m eyeing up already.

Why? Since it was spun off from Prudential in 2019, this FTSE 100 share’s provided an average yield of 8.9%. This means a £20,000 lump-sum investment when it first listed would have generated £12,520 worth of dividends already.

What’s more, it’s raised annual dividends every year since then, and is tipped to keep doing to by City analysts. This means dividend yields remain impressive, at 6.9% and 7.1% for 2026 and 2027 respectively.

There are no guarantees when it comes to dividends. And with M&G, payouts could be impacted by growing market competition. But I’m confident it will continue enjoying strong earnings and cash flows as the broader financial services sector takes off, driving more delicious dividends over time.

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Focusing on what, not when

I do not know when the market will next crash. Nobody does. But what is clear from history is that, sooner or later, it will.

Rather than fixating on when that might happen, I think a more productive use of an investor’s time now can be getting ready by deciding what to do when it does.

After all, it could open a big window of opportunity. It might not last long, so readiness is key.

Buying great shares at bargain prices

It helps to understand what is going on when the stock market crashes. Typically, there is some proximate cause, or causes. The underlying prospects of a sector may have changed, for example.

Take the 2008 financial crisis as an example. Banking shares nosedived – and for good reason. The prospects for the sector suddenly looked much worse than before.

So while Lloyds’ shares have almost doubled in the past five years, they are still 68% below their 2007 peak (which in turn was already far below where the share stood back in 1999).

But a crash can often send down the price of shares whose underlying business prospects seem largely unchanged – and that can be an opportunity.

Used the right way, it can even be an opportunity that ultimately helps the savvy investor retire early.

Same dividend, different share price = different yield

That is because of the difference in dividend yield a share offers depending on the purchase price.

Take asset manager M&G (LSE: MNG) as an example. It currently pays 20.5p a year in dividends. It aims to grow that amount annually and has been doing do, though no payout is ever guaranteed.

The current share price of M&G means that someone buying today can earn a yield of 6.7%. That is already tasty and well over double the FTSE 100 average.

But someone buying in the March 2020 stock market crash paid much less for M&G shares. The share price has risen 175% since, making for a tidy capital gain.

What about dividends though? The simple arithmetic of dividend yield means that someone buying into M&G at that far lower price in 2020 would now be earning a yield of over 18%.

Compound a retirement portfolio at 6.7% and it will take 11 years to double in value. By contrast, compounding it at 18% annually should mean it doubles in just five years.

Here’s how I’m preparing now!

I still think M&G is an attractive business. It has millions of customers, a strong brand and proven cash generation potential underpinning that above-average yield.

But there are risks too. I fear current market instability could see investors withdraw more from M&G funds than they put in, eating into earnings.

I think M&G merits consideration even now. But if I could buy a diversified range of blue-chip shares like it at much lower prices during a market crash, that could potentially give me the opportunity to retire early.  

The post A stock market crash could help you retire years early. The reason’s simple appeared first on The Twelfth Magpie.

It does involve risks, like any investment, but it can also produce potentially lucrative rewards.

For example, with a long-term approach and regular contributions, I think someone can realistically target an average monthly passive income of close to £3k.

Here’s how!

Setting realistic expectations is important

This is not some pie in the sky fantasy, so it is helpful to be clear about some of the expectations involved.

When I mentioned long-term contributions, I was envisaging a 20-year timeframe during which money is invested regularly and dividends reinvested to help grow the pot faster. That is before turning on the passive income taps (and stopping contributions to the Stocks and Shares ISA) after two decades.

I also mentioned regular contributions. In my example, I imagine someone starting with an empty ISA and then adding £1k each month for 20 years. At that point, the monthly passive income ought to be around £2,962.

Is all of that necessary? No! Someone could use a shorter timeframe, lower contributions – or both. But that would correspondingly reduce the passive income target.

Still, for many people, even passive income well below £3k a month would be welcome, if they can tailor the plan to their own financial circumstances.

Aiming for a 7% annual return

In this example, I presume the ISA can generate a compound annual gain of 7% for the 20 years of investment, then a 7% dividend yield.

At the moment the FTSE 100 yield is below half that level. Capital gain can boost compound annual gains on top of the dividend yield, but by the same measure any capital loss could hurt it.

So is a 7% target realistic? In today’s market, I think it can be, even while focusing the ISA on a diversified portfolio of blue-chip shares.

Fees, commissions and other charges can also eat into the returns, so it is worth shopping around when looking for the most appropriate Stocks and Shares ISA.

One share to consider…

One UK share I think income-focused investors ought to consider at the moment is FTSE 100 asset manager M&G (LSE: MNG).

The company has millions of clients spread across multiple markets. Its strong brand, long experience and deep expertise in financial markets can all help it do well. On top of that, it benefits from operating in a market that has strong, resilient demand.

Taken together, those factors help explain why M&G is able to be highly cash generative. That supports a 6.7% dividend yield. The firm also aims to keep growing its dividend per share annually, as it has over the past few years.

But dividends are never guaranteed and one risk I see is current investor nervousness about high markets and geopolitical volatility leading clients to pull more out of M&G funds than they put in. That could hurt earnings.

As a long-term investor though, I think the prospects for M&G look strong.

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Personally, I think I’ve found them all in FTSE 100 wealth manager M&G (LSE: MNG). I’m sitting on a total return of 92% since adding this stock to my Self-Invested Personal Pension (SIPP) less than three years ago (July 2023). The share price has climbed from 200p to 300p in that time, an increase of 50%. Reinvested dividends have done the rest.

It helped that M&G shares were yielding 10% when I bought them, which is an extremely high rate of dividend income. But it’s also a brilliant example of how income can turbocharge growth. The dividend hits my account twice a year, typically in May and October, and I really notice the difference. Although I’ve bought 3,028 shares from my own pocket, today I own 3,858. The additional 830 came through reinvested dividends.

Why do I like FTSE 100 income stocks so much?

I think many investors underestimate the power of FTSE 100 stocks. The index has grown nicely lately, rising 45% over the last five years. Okay, that’s below the 77% increase on the S&P 500, but UK blue-chips pay more income.

The average yield on the FTSE 100 is 3.3%, against roughly 1.1% for the S&P 500. That narrows the gap, especially for investors who target higher yielders like M&G.

Today, investors won’t get the same level of income as I did as the trailing yield’s now 6.8%. That’s still pretty generous and, with luck, it’s only for starters.

The board’s aiming to increase shareholder payouts by 2% a year. That’s forecast to lift the yield to 6.99% in 2026 then 7.2% in 2027. Dividends are never guaranteed, but I think M&G looks in decent shape to support them.

Last year, its Solvency II coverage ratio hit 242%, up from 223% in 2024, driven by strong operating capital generation and favourable market movements. M&G only joined the FTSE 100 in 2019, but has increased shareholder payouts every year since. So what about the growth?

Can the M&G share price keep climbing?

That isn’t guaranteed either, of course. And I think the M&G share price could slow after such a strong run that’s seen it climb 40% in the last 12 months. Yet with a forward price-to-earnings ratio of 12.4, I don’t think investors are overpaying today.

Obviously, these are volatile times, and if we get a wider stock market correction, M&G shares will feel it. It also operates in a fiercely competitive market and needs to keep finding new streams of business to maintain growth and keep the cash flowing. But while future share price gains may come in fits and starts, the steady stream of reinvested dividends should help total returns compound nicely over time.

Personally, I think M&G’s one of the most compelling passive income opportunities to consider in the FTSE 100 right now. I’ll be watching closely to see whether it can sustain those dividends while continuing to deliver some growth on top.

The post Why this 6.8% high yielder is now my favourite UK passive income and growth stock appeared first on The Twelfth Magpie.

That can be a lucrative approach to generating money without having to work hard for it. To illustrate, let’s imagine somebody has a spare £5k they want to invest.

Choosing a suitable investment vehicle

The first step will be putting that money somewhere it can be used to buy and hold shares that hopefully will earn dividends. That may be a share-dealing account, Stocks and Shares ISA or trading app, for example.

Lots of different options exists and different investors have different priorities, so it is important to take some time and compare choices.

Buying a diversified range of blue-chip shares

The money can then be put inside the vehicle. Once the investor feels confident that they understand at least basics of stock market investing such as how to value shares and what allows a company to fund dividends, they can start to buy dividend shares.

Even the best companies could run into difficulties. A simple way to reduce the risk if one share does that is to diversify across a few different choices and £5k is ample for that.

As dividends are never guaranteed to last, it is important to look carefully at companies and consider not only their current business performance but also their future prospects, as well as how accurately today’s share price reflects that.

My own focus tends to be on investing in proven companies that have shown their business model works. Lots of blue-chip shares that make profits and pay dividends can provide a fertile hunting ground.

Earning the income

How much £5k might generate in passive income depends both the dividend yield and timeframe. Yield is what the shares pay annually in dividends, expressed as a percentage of their purchase price.

Currently the FTSE 100 yields around 3% but I think a 6% yield is an achievable target in the current market. On £5k, that would mean some £300 a year of passive income.

But an investor might decide to reinvest dividends. This is known as compounding and can be a financial force multiplier. Compounding £5k at 6% for 10 years, for example, it would grow large enough to earn around £537 of passive income each year.

Or, if someone was willing to wait for 20 years before drawing down the dividends, compounding could help them reach a point where they earn £962 of passive income annually.

One income share to consider

I think a dividend share investors should consider is M&G (LSE: MNG). The FTSE 100 asset manager aims to raise its dividend per share annually. That is not guaranteed, but M&G has managed in recent years. It yields an attractive 6.8% right now.

There are risks. With millions of customers spread across multiple markets, M&G could see some pulling out funds amid market choppiness like we are seeing this year. That could hurt profits – and perhaps dividends.

But I see that large customer base as an asset. The company has a strong brand and deep asset management expertise. It is also a proven cash generator. That bodes well for future dividends.

The post Here’s how much passive income £5k invested this month could earn in years to come appeared first on The Twelfth Magpie.

• Robust balance sheets.
• Diverse revenue streams that deliver resilient earnings.
• Competitive advantages that protect profits and dividends, even in downturns.
• Mature business models that prioritise dividends over capital investment.

The thing is, no dividend-paying share is without risk. Take Diageo, which cut the dividend in February following sales pressures. It had consistently grown the annual dividend for more than 25 years prior to this.

Want to know how to build a resilient second income with an ISA? That’s great, because I have a plan…

Dividends for growth

Dividends are a powerful tool for creating long-term wealth. By reinvesting these cash rewards, investors can accelerate the compounding process, leading to incredible portfolio growth.

The bigger the ISA, the larger the passive income that can be generated in retirement. I’ll show you how.

Let’s say you’re putting £300 in a Stocks and Shares ISA each month. With this, you build a shares portfolio with an average 4% dividend yield. If you spent rather than reinvested your dividends, after 25 years you’d have an ISA worth roughly £178,000, based on a total average return of 9%.

But what about if you instead reinvested these dividends to grow the portfolio? Now we’re talking. With this included, you’d have an ISA worth around £351,000. That would then deliver an £28,000 yearly income if invested in 8%-yielding stocks.

Which FTSE 100 shares to buy?

As I say, dividends are never guaranteed. But here’s the thing: buying a wide selection of dividend-paying shares can deliver an extremely reliable income stream over time.

Here’s an example of what a well-diversified portfolio might look like:

This collection has a decent record of dividend growth, ranging from six years to more than half a century. It has a healthy average dividend yield of 4.3%, beating that one we used in the earlier example. And importantly, it’s well diversified by sector and region, providing resilience across the economic cycle.

M&G’s a dividend share I’m looking at for my own portfolio. It has the shortest length of dividend growth among this grouping. But that’s not a negative thing — it simply reflects the fact it’s only been a standalone business since 2019.

Since then, annual dividends have grown every year, even during pandemic-hit 2020. The reason? Its capital-light operations and recurring fee-based income have supported robust cash generation.

M&G’s Solvency II capital ratio’s 242%, up from 223% a year ago. So even if an economic downturn impacts its share price, the company remains in good shape to keep paying a large and growing dividend. I think it’s one of the best FTSE income shares to consider right now.

The post 9 dividend-paying FTSE 100 shares to target a huge ISA retirement income! appeared first on The Twelfth Magpie.

Such an approach can have both pros and cons. Here are a couple of each.

Pro: it’s a genuinely passive income approach

Some so-called passive income plans seem anything but passive to me in practice. For example, they can involve all the initial legwork of setting up a business even if, supposedly, it will effectively run itself in future.

By contrast, it is possible to buy shares, then sit back and earn any dividends they pay. That is what I regard as genuinely passive.

Con: dividends aren’t guaranteed

If you put money into a Cash ISA, a fixed passive income is almost guaranteed. I say almost because there may be exceptional circumstances, such as a run on a bank as happened at Northern Rock less than 20 years ago.

Even then though, depositors are ordinarily automatically insured up to a certain level, so even though the promised returns may not materialise, their capital ought to be safe within that limit.

Dividends, by contrast, can move around and often do. Some go up, some go down, some disappear altogether, whether temporarily or forever.

A properly diversified portfolio of dividend shares can help reduce the possible impact of that risk on passive income streams, but it remains a risk.

Pro: participate in the potential gains of a brilliantly-performing business

Looking at that comparison from another perspective though, fixed interest rate investments tend to have a maximum possible return.

Compare that to a share like M&G (LSE: MNG). The share yields 6.8%, meaning that someone who invests £100 today will hopefully earn £6.80 in passive income each year.

In fact, they could earn more, as the FTSE 100 asset manager aims to grow its dividend per share annually and has done so over the past few years (though, of course, that is never guaranteed).

Not only that, but the share price has grown 38% over the past five years.

So £100 invested in May 2021 would now be worth £138, even before taking into account passive income from dividends.

Owning shares in a business that does well can potentially therefore help someone earn passive income — and also capital gains.

M&G has a client base in the millions, multinational footprint and deep asset management experience I think can help it.

Con: money’s at risk

Again though, there is a flipside. Like any business, M&G faces risks. For example, current stock market turbulence could see clients pull money from its funds. If that happens, earnings might fall – and that may be bad news for the dividend.

Money in the bank, as I explained above, is typically protected by certain industry-backed guarantees like the Financial Services Compensation Scheme. Dividend shares offer a different risk profile. Not only are dividends not guaranteed, but the shares also carry the risk of capital loss. Then again, as I demonstrated with M&G, they carry the potential for capital gain.

In fact, I see M&G as a dividend share for investors to consider right now.   

The post Some pros and cons of buying dividend shares for passive income appeared first on The Twelfth Magpie.