Latest news with #Legal&General
Yahoo
14-06-2025
- Business
- Yahoo
My Legal & General shares are being battered by rival Aviva! Time to consider switching?
Legal & General (LSE: LGEN) shares come with a trailing dividend yield of 8.36%, one of the highest on the FTSE 100. Usually, a yield that high would set alarm bells ringing. But I think it's sustainable. If I didn't, I wouldn't have bought the stock several times in 2023. What gives me confidence is its payout history. Over the past 15 years, Legal & General has increased its dividend every single year but one. The exception was 2020, during the Covid pandemic. I'll forgive that. The government was twisting arms at the time. Payments resumed the next year. Over 15 years, Legal & General's dividends have grown at a compound rate of 12.12% a year. That's impressive but one thing worries me. The growth rate has slipped to 6.62% over 10 years and just 3.98% over five. Closer inspection shows payouts have risen 5% in each of the past four years, but there's change coming. Between 2025 and 2027, the board only plans to increase them by 2% a year. I've defended that decision before. With such a generous yield, a lower growth rate didn't seem like a big deal. But put next to a broader slowdown in dividend growth, I'm no longer brushing it off quite so easily. This matters, because Legal & General shares have done badly. They're up just 3.4% over one year and less than 3% over five. In the same time, big FTSE 100 rival Aviva (LSE: AV.) grew 30% and 120%, respectively. That's a bruising comparison. Aviva's dividend growth is also a clear winner. Over the last five years, Aviva has grown its payout at a compound annual rate of 18.4%. It even paid a dividend in 2020, which now looks like a badge of honour. I'm clearly backing the slower horse, and Aviva's recent trading update has only widened the gap. On 15 May, the insurer heralded a 'great start' to 2025, with premiums rising by almost 10%. CEO Amanda Blanc sounded upbeat, saying the group had a strong balance sheet, clear strategy, and was hitting targets across growth areas. Aviva is now aiming for £2bn in operating profit by 2026, and cumulative cash remittances of more than £5.8bn by then. To be fair, Legal & General isn't asleep at the wheel. In March, it hailed 'strong' 2024 performance and unveiled a £500m share buyback. That's part of a wider £5bn capital return plan over three years, roughly 40% of its market value. I won't be switching horses. It always seems that the minute I change queues – at the airport, in the bank, wherever – the one I just left starts moving faster. That would surely happen if I hopped over to Aviva now. Also, I prefer the idea of buying laggards that could bounce back, rather than chasing winners after they've already flown. Now here's the clincher. Legal & General still pays me handsomely. I received £305 in dividends on Thursday and promptly reinvested the lot. Aviva offers a solid 5.75% yield. Investors might consider buying it for added growth potential. But for me, Legal & General's shareholder returns are too juicy. I've always had a sweet tooth. The post My Legal & General shares are being battered by rival Aviva! Time to consider switching? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Harvey Jones has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
14-06-2025
- Business
- Yahoo
Want to generate a £1,600 second income each year from a £20k ISA? Here's how to try!
Earning a second income from dividends is a simple but potentially powerful way for someone to supplement their main income. Here is how a £20k Stocks and Shares ISA could generate a £1,600 annual second income. The first move, of course, would be to choose a Stocks and Shares ISA to put the £20k into. There are lots of options available, so an investor ought to spend some time deciding which one best suits their own needs. Earning £1,600 from a £20k ISA requires a dividend yield of 8%. One approach could be simply to put the money into an 8%-yielding share. But there are a couple of big risks doing that, as I see it. The lack of diversification adds unnecessary risk – for example, if that company goes bankrupt, the entire ISA could end up worthless. Also, dividends are never guaranteed, so investing solely based on yield seems unwise to me. I think it is important to understand how a business works, so an investor can make a judgement about how likely it seems in future to throw off excess cash flows that can be used to fund dividends. Bearing that in mind, an investor might want to spread the £20k ISA across five to 10 different shares. The 8% figure is an ambitious target for dividend yield, if sticking to quality blue-chip companies with proven business models. It is over double the current FTSE 100 yield. It is possible in today's market though. One share I think investors ought to consider is FTSE 100 financial services firm Legal & General (LSE: LGEN). It focuses on retirement-linked products. That is a large, resilient and potentially very lucrative market. Thanks to its iconic brand and umbrella logo, deep experience, large customer base and proven model, Legal & General is able to perform well even though it faces many rivals. The planned sale of a US business will give its coffers a short-term boost, although I see a risk that it will reduce the business's overall profit level, potentially making it harder to keep growing the dividend per share by 2% annually as it is currently doing. One of the benefits of earning a second income from an ISA could be that the money comes tax-free, depending on the investor's individual situation. 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. That could be withdrawn regularly. However, an alternative exists: leave the dividends in the ISA so they can be used to buy more shares. That is known as compounding and is a powerful technique to build wealth. Compounding a £20k ISA at 8% annually for a decade, for example, would mean that 10 years from now it will be worth over £43k. At an 8% yield, that would produce an annual second income of over £3,450. The post Want to generate a £1,600 second income each year from a £20k ISA? Here's how to try! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
New York Post
10-06-2025
- Business
- New York Post
Gen Z wants to marry for money — but not for the reason you would think: ‘They're being strategic'
Forget love at first sight — for Gen Z, it's love at first bank statement. Romance in 2025 is looking less like a rom-com and more like a merger — with Gen Z treating relationships like corporate consolidations, where assets, not just affections, are under scrutiny. 'Wealth is becoming more important in marriage,' Dr. Eliza Filby, a generational researcher, recently told Newsweek. The author of 'Inheritocracy: It's Time to Talk About the Bank of Mum and Dad,' added, 'It is the merging of two banks of mom and dad. It is the merging of dynasties.' That's right — Netflix-and-chill is getting replaced by credit-check-and-chill. Filby says young lovebirds aren't just picking partners based on chemistry anymore. In today's economy, family fortunes can be the real aphrodisiac. 3 Forget sparks — Gen Z is chasing stacks. Filby says family money is the new aphrodisiac in today's love market. fizkes – 'The reality is that life chances and opportunities are no longer shaped by what we learn or earn, but by whether we have access to the bank of mom and dad,' she told the outlet. And that's not just a metaphor. The so-called 'parents' bank' is now one of the biggest players in the U.S. economy, transferring trillions through gifts, property and inheritance. In fact, a 2018 Legal & General study found it ranked as the seventh-largest mortgage lender in the country. 'That pathway into adulthood — leaving home, becoming financially independent, getting married, having kids — it is now so expensive that most young people cannot do it without family support,' Filby said. No surprise, then, that more and more financially strapped Gen Z daters are swiping right not just for love, but for long-term liquidity. 3 Flying the nest isn't cheap — so Gen Z is hunting for partners with deep pockets, as adulthood now comes with a parental price tag, experts say. JD8 – Amber Brooks, editor-in-chief of dating advice site previously told The Post that younger generations aren't afraid to factor in finances when filtering out flings. 'We're seeing young people be more upfront about how a partner's career or lifestyle could impact their future,' Brooks said. 'They aren't being shallow—they're being strategic.' In other words: screw a meet-cute at a coffee shop — Gen Z wants to know your 401(k) before they even know your favorite color. It's a far cry from the days of star-crossed lovers and fairy-tale endings. Today's Gen Z daters are opting for power couples over puppy love — and don't mind if that sounds a little transactional. Call it capitalism with cuddles. 3 Gen Z isn't looking for soulmates — they're scouting business partners in love, and they're not shy about making it a power play. zimmytws – And if your dynasty isn't stacked with generational dollars? You might find yourself ghosted — financially and romantically. 'While we once believed in a meritocracy,' Filby said, 'the idea that education and hard work would naturally lead to prosperity, times are changing.' Looks like Gen Z isn't just looking for 'the one' — they're looking for 'the one with a trust fund.'
Spectator
01-06-2025
- Business
- Spectator
Why is your pension fund so obsessed with net zero?
Legal & General is Britain's largest asset manager, with over £1 trillion on its books. Every pound it manages should be dedicated to achieving the highest possible returns. This matters a lot: L&G manages over five million pensions in the UK. But in recent years, the asset manager has been particularly concerned with fashionable causes, instead of being entirely focused on making sure your retirement is secure. That is why I recently attended their AGM. I wanted to learn why the board is wedded to net zero, despite their fiduciary duty to clients, and whether they would consider reprioritising saver returns instead. At the Q&A I highlighted that US competitors have dropped their net zero ambitions. Most have pulled out of the 'Net Zero Asset Owner Alliance' – a UN-led consortium of asset managers 'committed to decarbonising their investment portfolios and achieving net-zero emissions by 2050.' L&G – along with most other British pension fund managers – is still a part of this alliance. But their commitment to decarbonising their portfolios and advocating for 'public policies, for a low-carbon transition' are premised on a net zero consensus that no longer exists. At the moment, roughly half of the public support either Reform or the Conservatives. Both parties oppose net zero by 2050. It is therefore reasonable to assume, as I told the board, that many with L&G pensions, do not want their retirement outcomes subordinated to the green agenda. In response, the board told me that its clients want to align with net zero by 2050. Whilst the board acknowledged that complex trade-offs exist, they did not explain what these were. Instead they doubled down, reaffirming their net zero commitment, before asserting that decarbonisation offers stellar investment opportunities. The problem is that these opportunities rely on government subsidy.
Yahoo
30-05-2025
- Business
- Yahoo
Will Labour's pension changes actually save you an extra £6,000?
The government says millions of workers could get a £6,000 boost to their retirement fund as a result of wide-ranging pensions reforms. On Thursday, Rachel Reeves revealed more details of the Pension Schemes Bill, which will pave the way for the creation of more so-called "megafunds" managing at least £25 billion in assets within the next five years. Earlier this month, 17 major workplace pension providers signed a voluntary agreement called the Mansion House Accord, with a view to boosting pension returns. Aviva and Legal & General are among the providers who have committed to invest at least 10% of their workplace pension portfolios in assets like UK infrastructure, property and private equity by 2030. The government says the agreement will be good news for those who have defined contribution (DC) pensions - the most common type of private pension in the UK. Here's what the reform means in real terms — and how likely it is that savers will gain a £6,000 pension boost. A defined contribution (DC) pension is a type of pension scheme where you (and if it's a workplace pension, your employer) contribute money into a personal pension pot. The money you and your employer contribute is invested by your pension provider. The value of your pension at retirement depends on how much has been paid in and how well the investments perform. Pension providers typically invest in a mix of assets, including stocks and shares (also known as equities), government and corporate bonds, property, and commodities, like gold and cash. This mix is chosen to balance risk and reward, meaning that your pension will benefit from long-term growth while also managing potential losses. Labour says the changes will benefit defined contribution (DC) pension savers by harnessing higher potential net returns available in private markets. According to the government, the signatories to the accord have said that £252 billion of assets are subject to the pledge. Helen Morrissey, the head of retirement analysis at financial services company Hargreaves Lansdown, said that while "there needs to be an element of flexibility" around the £6,000 uplift, the "increased efficiency" of the reforms looks like a positive step to boost defined contribution members' pots. She told Yahoo News: 'Markets can go up and down and this can have an impact on a member's pot. "However, these reforms look to enable schemes to invest in asset classes that were previously closed to them and there is potential for increased returns as a result. "The key to this will be access to a stream of high-quality opportunities and the government has committed to helping schemes deal with barriers that have previously stood in their way. "Increased efficiency will also help boost member pots. One of the key benefits of scale is that it enables schemes to drive down costs and the impact assessment shows this can have a material impact on the size of pension," she added. It is a combination of these increased efficiencies that will reduce pension fees, as well as the higher returns that the government has used to calculate the £6,000 figure. However, Sir Steve Webb, a former pensions minister, cautioned that the sum was "marginal at best", telling the inews that savers would need to start paying into their pensions from the age of 22 and never miss a year until retirement to potentially secure the maximum amount. When factored into the total size of the average retirement pot and how long they are used for Sir Steve said it is probably worth under £10 a week on your final pension. He added: "None of this factors in the costs of some of the other measures which they are proposing, which include creating a new process for the consolidation of micro pots, which will cost a lot of money to administer, and which will presumably increase pension costs." "They're clearly aiming to provide a 'retail' message to go alongside all this talk of multi-billion-pound pension schemes, but to be honest, this £6,000 figure is marginal at best.' The reforms enable pension funds to invest in major infrastructure projects and private businesses, which historically have delivered higher returns. The plan covers retirement savings for the majority of UK workers in two ways. Firstly, there are the 86 different local authority pension schemes, which provide for more than six million people in their retirement, the majority low-paid women. The £392bn in these schemes will be merged from eight pools to six asset pools by next March, reducing overheads and maximising returns. Local investment targets will also be agreed for local authority pension schemes for the first time, the Treasury said. Secondly, defined contribution schemes currently worth £800bn, covering millions of other private and public sector workers across the country, will also be consolidated. This will reduce management fees and operational costs, and boost savings for savers. Because of this, by 2030, the government says there should be more than 20 pension funds worth more than £25bn, in contrast to the current 10 available. While the move was agreed earlier this month, the government has now introduced a legislative back-stop, which will allow it to push through the new rules if insufficient progress is made by the end of the decade, according to the BBC. The 17 providers who have signed up are: Aegon UK, Aon, Aviva, Legal & General, LifeSight, M&G, Mercer, NatWest Cushon, Nest, now:pensions, Phoenix Group, Royal London, Smart Pension, the People's Pension, SEI, TPT Retirement Solutions and the Universities Superannuation Scheme (USS). The Pension Schemes Bill is due to be heard during this term of Parliament.
