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The State Pension means the world to millions, but it’s not enough. It pays a maximum of £12,547.60 a year, but anybody who tries to survive on that income alone will struggle. So what’s the alternative?
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).
Should you buy Legal & General Group Plc shares today?
Before you decide, please take a moment to review this report first. Despite ongoing uncertainties from US tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.
That’s why this could be an ideal time to secure this valuable research – Mark’s analysts have scoured the markets to reveal 5 of his favourite long-term ‘Buys’. Please, don’t make any big decisions before seeing them.
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.