{"id":147690,"date":"2025-09-19T16:23:10","date_gmt":"2025-09-19T16:23:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/147690\/"},"modified":"2025-09-19T16:23:10","modified_gmt":"2025-09-19T16:23:10","slug":"see-how-much-retirement-income-5502-legal-general-shares-generate-today","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/147690\/","title":{"rendered":"See how much retirement income 5,502 Legal & General shares generate today"},"content":{"rendered":"

\"Pakistani<\/p>\n

Image source: Getty Images<\/p>\n

Legal & General\u00a0(LSE: LGEN<\/a>) shares now give investors the second biggest dividend yield on the entire\u00a0FTSE 100, at just over 9% on a trailing basis.<\/p>\n

That\u2019s an absolutely stellar rate of income, roughly double what\u2019s on offer from a best buy instant access account. Only housebuilder Taylor Wimpey pays more.<\/p>\n

There\u2019s also the prospect of capital growth on top<\/a> if the Legal & General share price rises. It\u2019s a brilliant combination, and I personally hold the insurer in my own Self-Invested Personal Pension (SIPP).<\/p>\n

So why isn\u2019t every saver piling into the stock and filling their boots?<\/p>\n

High yield, high risk<\/p>\n

Legal & General\u2019s certainly popular, often featuring in the list of top 10 retail buys, but investing is riskier than saving. For a start, capital is at risk. A high dividend doesn\u2019t look so clever if the share price falls, which will erode the money investors originally put in.<\/p>\n

The Legal & General share price is up 5% in the last year and 20% over five years, with dividends on top. The total return\u2019s respectable, although not exactly mind-blowing.<\/p>\n

It\u2019s had a bumpy month, falling 9% after JP Morgan Cazenove trimmed its target price to 275p from 290p, citing pressure on earnings and rising competition in the pension risk transfer market.<\/p>\n

There\u2019s another worry. Investors usually like to see a dividend per share covered at least twice by earnings, but here they\u2019re forecast to be covered just once.<\/p>\n

Dividend strength and weakness<\/p>\n

Group profits have been uneven, while earnings per share growth has been negative for three years in a row, as my table shows. <\/p>\n

20202021202220232024Pre-tax profits\u00a31.499bn\u00a32.632bn\u00a3939m\u00a3195m\u00a3542mEPS growth-28\u00a0%55\u00a0%-62\u00a0%-43\u00a0%-61\u00a0%<\/p>\n

Yet the dividend per share has continued rising, with a 5% increase to 21.36p in 2024. Dividend growth\u2019s expected to slow to 2% now, below the current inflation rate of 3.8%. I still think the payout looks reasonably safe, but we never know.<\/p>\n

In 2025, the board\u2019s forecast to pay a dividend of 21.81p. So if an investor wanted to generate income of \u00a3100 a month, or \u00a31,200 a year, they\u2019d need 5,502 shares. At today\u2019s price of 238.30p, they\u2019d have to invest \u00a313,111.<\/p>\n

That\u2019s a sizeable outlay for one stock, and I\u2019d prefer to spread it around to reduce risk. FTSE 100 rivals M&G and Phoenix Group Holdings also yield above 8%, so there are alternatives in the same sector.<\/p>\n

Even so, Legal & General remains tempting. If interest rates start falling, its high yield should look even more appealing as cash and bond returns decline. That could attract more buyers and boost the stock too.<\/p>\n

Long-term rewards<\/p>\n

There are no guarantees. Unless earnings start to grow<\/a>, the dividend could be in trouble. Yet I\u2019m holding my shares and considering buying more on recent weakness. Investors might consider doing the same, but come to their own decision on whether the dividend is sustainable. <\/p>\n

As ever, they should buy with a long-term view. That gives the dividends and share price plenty of time to compound and grow. I\u2019m not expecting fireworks here, but with a yield of almost 9%, Legal & General may tempt income seekers who understand there are risks here too.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Legal & General\u00a0(LSE: LGEN) shares now give investors the second biggest dividend yield on…\n","protected":false},"author":2,"featured_media":70980,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,6014,4698,4176,4701,4702,4703,4704,4705,4706,4707,4174,4175,68010,56,54,55],"class_list":["post-147690","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-category-dividend-shares","tag-category-investing","tag-finance","tag-partner-feeds-dbc-media","tag-partner-feeds-fineco","tag-partner-feeds-flipboard","tag-partner-feeds-msn","tag-partner-feeds-pluto-invest","tag-partner-feeds-sharesight","tag-partner-feeds-yahoo-uk","tag-personal-finance","tag-personalfinance","tag-tickers_global-lse-lgen","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/147690","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=147690"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/147690\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/70980"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=147690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=147690"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=147690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}