That depends on what it is. One common way millions of people worldwide already earn passive income is through owning shares in well-known companies that pay dividends to their shareholders.

Such an approach does not require any work on the part of those shareholders. It is also flexible, as someone can invest as much or as little as they choose.

3 key variables to understand

The basics here are, well, pretty basic. As with all investing, when it comes to passive income, I try to stick to businesses I feel I can understand.

I spread my money over different shares so that if one disappoints me (for example by cancelling its dividend, which can always happen) then the overall impact on my passive income streams is limited.

How much income such an approach can earn depends on three key variables: how much is invested, at what yield, and for how long.

Time can help, for example if someone initially reinvests (compounds) dividends and only later starts using them as passive income.

To illustrate, imagine that someone invests £20k at a 6% compound annual growth rate. Here is what that could mean when they decide to start using their portfolio for income (presuming a 6% dividend yield):

As you can see, time rewards the patient investor. But while waiting 50 years for passive income might suit a 20 year-old forward planner eyeing their pension income, many people will want to start earning the passive income sooner.

In this example, after 30 years, that one-off £20k investment today would generate £6,892 a year in dividends – equivalent to around £574 a month.

Aiming for a 6% goal

Six percent is double the current FTSE 100 dividend yield. But I see it as a realistic goal while sticking to proven blue-chip shares.

In the initial phase of compounding, the 6% goal can also be helped by share price growth (though share price falls could eat into it). Another factor that can eat into returns is stockbroking charges, so choosing the right Stocks and Shares ISA is a smart move.

One share I think investors should consider is FTSE 100 financial services firm Standard Life (LSE: SDLF). The long-established business counts one in five UK adults as a client. I expect demand for pensions and retirement savings products to prove resilient over the long term.

Standard Life has proven its business model can generate substantial excess cash, supporting a juicy dividend. Currently the yield is 6.4%. The firm has grown its dividend per share annually in recent years and aims to keep doing so.

No dividend is guaranteed though, and with some £300bn of assets under management, the company faces risks. For example, a weak property market could force it to write down some its mortgage book, hurting earnings.

Over the long run though, I think the firm’s prospects look strong.

What income stock do we like better than Standard Life right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Christopher Ruane does not hold any positions in the companies mentioned.

The post £20,000 in savings? Here’s how it could be used to target £574 of passive income each month appeared first on The Twelfth Magpie.

Like a Cash ISA, it offers significant tax benefits — but, in my opinion, the key advantage is the flexible investment options. Rather than settle for a moderate cash return, investors can put a wide range of assets in their ISA to target outsized gains.

Yes, it does require a bit more planning and research — but as the saying goes: nothing worth doing is easy!

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.

So how much does an investor need in an ISA to target a sizable passive income of £15,000 a year?

Let’s do some basic maths

Naturally, the best amount to invest every month is as much as you can afford. But for the sake of this experiment, let’s say you can put away £400. For most UK citizens, that’s realistic — even if it means trimming some unnecessary expenses.

After a year, you’d have invested £4,800 into your ISA stock picks. Let’s say you target high-yielding dividend stocks like major FTSE 100 insurer Standard Life (LSE: SDLF).

It’s a solid option to consider, because it consistently yields between 6% to 10%. Build a portfolio of stocks like that, and you could be averaging an 8% annual return.

But 8% of £4,800 is only £384 — far off £15k. That’s where the magic of compounding becomes necessary. Keep reinvesting those returns back into the ISA and watch it grow to £187,570 in just over 17 years. Now, your 8% portfolio is returning over £15,000 a year.

Seventeen years isn’t that long when you think about the benefits: £15k on top of a basic State Pension equates to a comfortably livable retirement income.

Why Standard Life looks good now

Clearly, I’m bullish about Standard Life or I wouldn’t be holding the stock. But it isn’t just because of the meaty yield — the company exhibits the fundamentals to back a long-term investment thesis.

The share price has taken off in the past year, up 33%. That’s well ahead of competitors such as Aviva and Legal & General. On top of that, it’s been increasing its annual dividend at a rate of 3.18% for the past decade.

That’s important when investing for retirement income — if the dividend isn’t increasing in line with inflation, you’re losing income every year.

Here’s its 2025 results, compared to 2024:

However, on valuation it looks more expensive than some rivals. That means any earnings miss or reduced guidance in the next results could lead to a short-term price dip. Still, on balance, it looks like a company heading in the right direction. 

The bottom line

For those considering building a second income stream for retirement, a Stocks and Shares ISA can make a huge difference. Especially when packed full of high-yielding income shares.

But remember, dividends aren’t guaranteed, so dig deep and find those companies that are consistent, reliable and transparent. With a strong portfolio, £15k a month becomes a realistic target.

What income stock do we like better than Standard Life right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Mark Hartley owns shares in Standard Life, Aviva and Legal & General.

The post Here’s how much an investor needs in a Stocks and Shares ISA to target £15,000 of passive income a year appeared first on The Twelfth Magpie.

The answer can be quite substantial…

From zero to £20,294 a year

For example, imagine somebody has an empty ISA now. Or perhaps they do not even have an ISA, so decide to set one up this July.

If they put in £500 a month and compound the value of the ISA at 6% annually for 25 years, it ought to be worth around £338,240. At a 6% dividend yield, that could generate some £20,294 a year in passive income.

The same approach could work with less (or more) money and a different timeline – but the size of the second income would be correspondingly different.

Is 25 years a long time to wait? Maybe, depending on what your objectives are. As I see it though, this is the sort of approach that someone still working could take as a way of building towards a second income later in life.

Something I see as good about this approach is that once the period of contributing ends (I use 25 years as an example, but in reality the investor can decide that for themselves), the income could hopefully flow for the rest of their life without them needing to put in another penny.

Earning high-quality dividends while you sleep

In fact, they could earn more than that, or less, as dividends are never guaranteed to stay the same. That is why it makes sense to diversify the ISA across a range of carefully chosen blue-chip shares.

Instead of going for the highest yield, or the fastest-growing dividend, I try to look at the underlying business and also its current valuation.

Do I think the business has long-term potential to generate sizeable free cash flows that could be used to fund dividends?

Do I think the share price offers good value? This matters even when income not capital gain is the objective, as if the price is too high then I may end up losing money when selling the share down the road, despite having had lots of dividends while owning it.

This blue-chip, high-yield share’s caught my eye

One FTSE 100 income share I think merits consideration right now is financial services group Standard Life (LSE: SDLF).

Is this a thrillingly exciting growth stock? No – and that is part of its appeal, in my view.

It has long-established, proven businesses that benefit from enduring demand for pensions and retirement savings products.

With one in five British adults a customer, the company benefits from economies of scale, deep financial markets expertise and the likelihood of ongoing strong client demand.

That translates into solid cash flows that support its juicy dividend. Standard Life has grown its dividend per share annually for years already — and aims to keep doing so.

One risk I see I see is financial markets turbulence. This could hurt the valuation of some of the firm’s assets, such as its property portfolio. That may eat into earnings.

Taking a long-term approach to investing though, I see a lot to like about Standard Life.

What income stock do we like better than Standard Life right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Christopher Ruane does not hold any positions in the companies mentioned.

The post Turning an empty ISA into a £20,294 annual second income for life! appeared first on The Twelfth Magpie.

So let’s say I want to earn £5,000 a month without having to lift a finger. How large does my ISA portfolio need to be? Let’s crunch the numbers.

How much does a FTSE 100 tracker need?

At the FTSE 100‘s current index yield of around 3.05%, an investor would need a portfolio worth around £1.97m to generate £60,000 a year, or £5,000 a month. That’s a substantial sum. And while compounding over decades can absolutely get a disciplined investor there, there’s a way to dramatically accelerate the process.

By picking individual high-yield stocks, a portfolio can earn a far more impressive return on investment. For example,  Standard Life (LSE:SDLF) currently offers a dividend yield of 6.6%. And at that rate, an investor only needs a portfolio worth around £909,000 – less than half what a FTSE 100 tracker demands.

So is Standard Life actually a good investment?

A business built for the UK’s retirement boom

As a quick reminder, Standard Life’s a specialist UK retirement savings and income business. It manages over £317bn of assets on behalf of workplace pension customers, retail savers, and institutional clients, generating income through management fees and insurance margins.

And the underlying business is seemingly in excellent health. In 2025, adjusted operating profit rose 15% to £945m while operating cash generation (a key metric for dividend sustainability) grew 5% to £1.47bn.

The retirement market’s the real growth engine here. A 14% increase in pension customers drove stronger workplace inflows, while the annuities business closed a record £1.9bn pension risk transfer deal. And looking ahead, management’s anticipating £1.1bn in underlying operating profits this year.

Is there anything to worry about?

Not everything’s straightforward. And there’s a structural risk embedded in the business model.

On paper, Standard Life actually reported a net loss of £394m last year. This stems from a legacy accounting distortion caused by insurance contract valuation rules that can diverge sharply from the underlying cash performance.

In other words, it was largely a paper loss rather than a cash one. That’s not necessarily a major issue. But it does highlight the accounting complexity of this business. And when combined with other accounting quirks, tracking the true underlying performance can become quite challenging.

In fact, this lack of transparency plays a big role in why the yield’s so high: the market’s pricing in uncertainty that could catch investors off-guard in the future.

So is it worth considering?

For investors whose primary goal is passive income, Standard Life deserves a closer look, in my opinion.

The dividend’s well-covered by cash generation, the retirement market tailwind is structural and long-dated, and the yield’s more than double a FTSE 100 tracker currently offers.

Is there uncertainty through complexity? Absolutely. But that complexity is also what’s behind a generous yield. And for investors willing to dig through the numbers, I think Standard Life shares could prove quite lucrative over the long run.

What income stock do we like better than Standard Life right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post How much is needed in an ISA to target a £5,000 monthly passive income? appeared first on The Twelfth Magpie.

Two that have grabbed my attention this month are National Grid (LSE:NG.) and Standard Life (LSE:SDLF). As I’ll show you, the dividend yields on these Footsie companies beat the 3% index average by a good distance.

A rock-solid ISA pick?

Investing in the UK’s power network for the ‘net zero’ age is costing billions of pounds. National Grid has pledged £70bn between 2026 and 2031, more than double what it paid in the previous five years. It’s possible costs could keep spiralling, putting dividends in danger.

However, this huge investment programme also provides significant long-term opportunities that could power dividends. Expanding and modernising the grid should allow National Grid to grow its asset base by 10% a year, underpinning similar earnings growth.

What’s more, National Grid’s highly defensive business model makes it a more stable dividend payer than many other UK shares. The business benefits from:

• An industry monopoly protecting earnings from competitive dangers.
• Revenues that are linked to inflation.
• The defensive nature of electricity demand.

Unfortunately, these strengths didn’t stop National Grid from reducing dividends in 2024. But the company’s balance sheet is far stronger today thanks to a blend of equity raises and asset sales. So while risk remains, the chances of another cut are low.

For this financial year, the dividend yield on National Grid shares is 4%. This rises to 4.1% and 4.2% for the following two years.

A 7%+ income opportunity?

Standard Life’s operations are far more sensitive to the broader economy than National Grid’s. Market downturns can reduce assets under management and fee income. People may also contribute less in savings and pay reduced sums into their pensions.

So why does the company have (in my view) one of the best dividend records on the FTSE 100? In a nutshell, Standard Life’s operations are capital-light and generate enormous recurring revenues.

Spectacular cash flows and a strong capital ratio help it maintain a progressive dividend policy even in tough times. Its Solvency II ratio is an exceptional 176%, according to latest financials.

The result? Annual payouts at Standard Life have risen every year since 2016. In addition, the dividend yield has averaged 7.1% in that time. That’s exactly the sort of reliability many investors look for in a Stocks and Shares ISA.

The good news is City analysts expect the firm to remain hugely cash generative, underpinning more large growing dividends on top of share buybacks. Standard Life shares yield an enormous 6.7% for this year, and 7% and 7.3% for 2027 and 2028 respectively.

For Stocks and Shares ISA holders seeking long-term income, National Grid and Standard Life both deserve consideration. One offers reliable, defensive income, while the other combines market-leading yields and excellent dividend growth.

What income stock do we like better than National Grid Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

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

The post 2 high-yield FTSE 100 shares to consider in a Stocks & Shares ISA! appeared first on The Twelfth Magpie.

In the current financial year, the full new State Pension is worth a fraction over £12,547. Unfortunately, that’s £1,353 below the £13,900 a year required to bag the basic ‘minimum’ lifestyle, according to the latest updated Retirement Living Standards survey (below).

As my table below shows, it’s nowhere near big enough to fund a moderate lifestyle, let alone a comfortable one.

Source: Retirement Living Standards survey from Pensions UK.

A popular way to make up the shortfall is to build a balanced portfolio of UK shares from the FTSE 100 and FTSE 250.

These reward you in two ways. First, by building up your capital as their share prices rise. And second, by paying investors regular dividends. Best of all, both the growth and income is entirely free of tax inside a Stocks and Shares ISA.

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, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and obtaining professional advice before making any investment decisions.

How much do you need in your ISA?

Now let’s say an investor is targeting a passive income of £995 a month. That works out to £11,940 a year. That still won’t be enough for a ‘moderate’ lifestyle, even after it’s added to the State Pension. But it will nudge you closer. With luck you’ll have other sources of retirement savings, such as a company or personal pension. The more the merrier, frankly.

How much you need in your pot to generate that £995 depends on the underlying yield from the shares you own.

• With a 4% yield, you’d need £298,500 invested.
• At 5%, the required total falls to £238,800.
• And at 6%, the figure drops to £199,000.

Those look daunting, but can be achieved over longer periods such as 30 years. Let’s say somebody invests £200 a month, and it grows at an average annual rate of 9.64%. That’s the average annual return on a Stocks and Shares ISA over the last decade, according to advisory group Unbiased. By the end of that term, they’d have £404,396. Which is way more than my target.

Here’s why I bought Standard Life shares

One dividend share I rate right now is FTSE 100 insurer Standard Life (LSE: SDLF), which sells protection and retirement products. Today, it has a trailing dividend yield of 6.5%, one of the most generous on the blue-chip index.

Standard Life doesn’t just pay investors a high income. It aims to increase it every year. The board has increased shareholder payouts for the last 10 years in a row, at an annual average annual rate of 3.18%. Better still, investors have got some pretty decent growth on top. The Standard Life share price is up an impressive 30% over the last year.

Dividends aren’t guaranteed, and Standard Life has to generate enough cash to fund them. And after a strong run, its shares may idle for a while. They might even fall. That’s investing. But over the long run, I think a balanced portfolio of stocks like this one make a tempting option to top up the State Pension.

Should you invest £5,000 in Standard Life 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 Standard Life made the list?

Harvey Jones owns shares in Standard Life.

The post How to top up your State Pension by targeting a second income of £995 a month appeared first on The Twelfth Magpie.

Either way, I think the secret to passive income is dividend shares. But how large would an ISA need to be to produce £1,220 a year? Let’s see.

A strong brand

One stock that’s built an excellent reputation for providing a generous return to its shareholders is Standard Life (LSE:SDLF). The group, which provides retirement products and insurance, currently claims to have one in five UK adults as customers. But when a deal to acquire the 3.7m clients of Aegon is finalised, this will increase further.

An impressive track record

Thanks to its healthy cash flows and growing business, the group’s steadily increased its payout over the past five years:

• 2025 – 54.7p
• 2024 – 53.3p
• 2023 – 52.0p
• 2022 – 49.6p
• 2021 – 48.2p

On average, it’s increased its dividend by 2.8% a year during this period. It means the stock’s currently (1 July) yielding 6.5%. What does this mean? It tells us that for every £1,000 invested, it should (no guarantees, of course) produce dividends of £650 over the next 12 months.

Importantly, using an ISA means this can be earned tax-free.

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.

But let’s assume someone doesn’t need this income immediately. Instead, they use it to buy more shares in Standard Life. This strategy’s known as compounding and can quickly help build a bigger investment pot and, eventually, a larger dividend stream.

For example, someone investing £10,000 could unlock dividends of £650 in year one. However, by reinvesting the £650, income of £692 could be generated in year two. Repeat this for 10 years and the ISA would be worth £18,771.

At this point, dividends of £1,220 could be earned, assuming the stock’s still yielding 6.5%.

In theory, this sounds very easy. But like any business, Standard Life has to overcome a number of challenges that could threaten its earnings and, consequently, its dividend.

Possible issues

Indeed, competition in the sector is fierce. With individuals acquiring many pension pots over the course of their working lives, there’s a trend towards consolidating these with one provider. I know from personal experience how easy the process can be. Of course, this could work in Standard Life’s favour. But it could also lead to an outflow of funds.

Also, the group has to maintain a large investment portfolio to meet its commitments. Although it focuses on less risky asset classes like government bonds, these can still be volatile and can be affected by global market turmoil.

However, I remain optimistic.

My view

The group’s pursuing a capital-light strategy with an emphasis on its fee-based revenue streams. This helped deliver a 15% year-on-year improvement in adjusted operating profit in 2025.

Looking ahead, higher interest rates — which can’t be ruled out following the war in Iran — could also help boost the sale of annuities. And by 2034, the UK retirement and savings market is expected to be 69% bigger than 10 years earlier.

Although there are plenty of UK stocks offering generous dividends, Standard Life’s one of my favourites. Personally, I think it’s one for income investors to consider.

What income stock do we like better than Standard Life right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

James Beard owns shares in Standard Life plc.

The post How much is needed in an ISA to unlock £1,220 of passive income a year? appeared first on The Twelfth Magpie.

Analysts expect more of the same in the coming years, giving the stock one of the most attractive income profiles in the leading index.

So, how much second income am I looking at from my current stake in the firm?

How does the growth momentum look now?

The foundation of dividend rises in any stock remains the underlying business’s fundamentals, particularly its earnings trajectory.

There are risks here for any firm, of course, with one for Standard being a sharper downturn in financial markets. That could reduce fee income and slow projected earnings rises. Another is a regulatory tightening in capital requirements, which could squeeze its margins.

That said, analysts forecast that Standard’s earnings will rise by a whopping annual average of 47.8% over the medium term at minimum.

Its full-year 2025 results released on 16 March this year showed IFRS adjusted operating profit jumping 15% year on year to £945m. Meanwhile, operating cash generation increased 5% to £1.474bn.

Management added that the firm — already the UK’s largest long-term savings and retirement company — should deliver another £500m of excess cash this year. And it reiterated it is on target to hit an adjusted operating profit of £1.1bn this year.

All this supports the company’s progressive dividend policy. It aims to lift the dividend in line with earnings per share growth. But if earnings slip in a particular year, the payout is kept at the existing level, not reduced.

So how much in dividend income?

Standard’s current dividend yield is 6.7% — more than double the FTSE 100’s present average of 3.1%. These returns can go up and down, of course, over time, as share prices and annual payouts change.

However, analysts forecast the firm’s dividend yield will rise to 7.1% this year, 7.3% next year, and 7.7% in 2028.

So, my £20,000 holding in the stock would make £23,089 in dividends after 10 years and £180,007 after 30 years. That marks the end of a standard investment cycle for long-term investors. It starts with first investments around 20 and finishes with early retirement options around 50.

The figures are based on the forecast of 7.7% as an average and on the dividends being reinvested in the shares. The process is called ‘dividend compounding’ and it effectively turbocharges these returns over time.

By the end of 30 years, the holding’s total value (including the £20,000 original stake) would be £200,007.

And that would deliver a yearly income of £15,401 by that point!

My investment view

For me, the combination of rising earnings, strong cash generation and progressive dividend policy makes Standard Life a compelling long‑term income anchor. The business is throwing off more excess cash each year, and management has shown a consistent commitment to returning that to shareholders.

The forecast yield climbing towards 7.7% only strengthens the case for building a larger second‑income stream over time. And with the company’s growth momentum still firmly intact, those payouts look well supported for the foreseeable future.

That is why I am continuing to add to my holding. And it is also why I think the stock deserves serious consideration from any investor focused on long‑term, reliable income.

Should you invest £5,000 in Standard Life 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 Standard Life made the list?

Simon Watkins owns shares in Standard Life.

The post How much would I need to invest in this FTSE 100 dividend star to aim for £15,401 a year in second income? appeared first on The Twelfth Magpie.

A crash can mean the value of a share portfolio plummets in short order. While that may only be a paper loss, it is still disconcerting for many investors.

But there are two sides to every story — and that is also true when it comes to a stock market crash. In fact, for someone who is investing with the intention of funding their future retirement, it can actually offer a once-in-a-decade opportunity to buy a variety of brilliant shares at bargain prices.

The relationship between share price and dividend yield

A cheap share price can be attractive for someone whose objective is capital gains. But it also offers the opportunity to earn a higher yield than would be possible buying exactly the same share when it costs more.

That is because dividend yield is a function of dividend per share (which is the same for all shares of a certain class) and the price paid for it, which can vary for exactly the same share, depending on when it was bought.

A sudden chance to buy cheap

As an example, let me use FTSE 100 financial services provider Standard Life (LSE: SDLF). At the moment, its yield is 6.8%. That is already juicy and well over double the FTSE 100 average.

Someone who bought in February 2020 would be earning only a little more, as at that time the share cost around 98% of what it does now.

But the following month it plummeted in the pandemic stock market crash. That pushed the share price down to just over £5. That is around 62% of the current share price.

So someone who bought Standard Life shares then would now be earning a yield of around 10% not the 6.8% on offer today.

This could help target early retirement

That is a substantial difference, but 6.8% is already a big yield. Compounding at that rate annually would allow an investment to double in 11 years.

But compounding instead at 10% annually, doubling the investment would only take eight years. In other words, buying great shares when they are on sale could help someone earn a higher yield. That could potentially let them hit their financial goals sooner and retire earlier.

What I’m doing now

As it happens, even at today’s price, I think Standard Life is worth considering. It has a proven business model and deep expertise in an area of personal finance that will likely endure for decades, thanks to a focus on pensions and retirement savings. It benefits from economies of scale as one in five adults in the UK are clients.

One risk is its mortgage book. If the property market stumbles, it could be forced to write down some valuations, hurting earnings.

I do not know when the property market may next crash, just as I do not know when the stock market will next be hit. Instead of trying to time the market, I am using my time to update my list of shares I would like to buy if a crash gave me an opportunity to buy them at an attractive price.

Should you invest £5,000 in Standard Life 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 Standard Life made the list?

Christopher Ruane does not hold any positions in the companies mentioned.

The post Think a stock market crash would be bad? What if it could help you retire early? appeared first on The Twelfth Magpie.

Let’s take a closer look.

Want to find out more?

Standard Life, until recently known as Phoenix Group, is currently (17 June) yielding 7.2%, more than twice that of the FTSE 100 (3.1%). And it’s been like this for a while now. Looking at the table below, its 2016/25 year-end yield has averaged 7.8%.

Over this period, it’s increased its dividend every year, apart from during the pandemic. Given the turmoil of 2020, I think we can forgive the group for keeping its payout unchanged when Covid-19 first reared its head.

So how can it consistently yield so much? In my opinion, the answer lies in the company’s impressive capacity to generate lots of cash.

How?

Standard Life is deliberately pursuing a capital-light strategy, which involves placing a greater emphasis on the fee-earning parts of its business. By adopting this approach, it frees up more cash, which can be used for other purposes including paying dividends to shareholders.

In 2025, it produced operating cash of £1.474bn. Of this, £548m was used for the dividend, £503m went towards “other recurring uses” (overheads, debt interest, and capital reinvested in annuities), with £423m left over. The group used the balance (described as “excess cash“) to repay debt as part of its plans to reduce its gearing.

But experienced investors know that dividends can’t be guaranteed. The savings and retirement market is becoming increasingly competitive and more people are having the confidence to manage their own funds, potentially removing the need to rely on industry professionals who will charge a fee. Also, if the group’s investment portfolio struggles, it will have less cash available. In these circumstances, there could be less cash left over to return to shareholders.

However, Standard Life’s recent financial performance demonstrates, so far at least, that it’s able to meet these challenges. And investors appear to be warming to the group.

Since June 2021, its share price has risen by a modest 13%, significantly underperforming the near-50% increase in the FTSE 100. However, since October 2023, it’s up over 75%.

But I don’t think we should get too carried away. Analysts have set a 12-month target that’s around 6% higher than today’s share price. All things considered, I think it’s the dividend that sets the group apart from many others. In my opinion, significant growth would be an added bonus.

A positive outlook

And there could be more to come.

By the end of 2026, Standard Life hopes to complete a £2bn deal to acquire the UK pensions business of Aegon. This is expected to increase operating cash by £160m a year. Over the five years post-completion, it’s forecast to deliver £400m of additional excess cash.

This suggests the group should be in a good position to increase its dividend further over the coming years.

Due to its impressive yield and because of the potential to increase its dividend further, I own shares in Standard Life. Others could consider adding some to their own portfolios.

Should you invest £5,000 in Standard Life right now?

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And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Standard Life made the list?

James Beard owns share in Standard Life plc.

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