Legal & General Share Discussion Threads

[pierre oreilly] 11/5/2021 09:25

Of course getting a decent income from divis isn't as simple as listing every share and fund in yeild order and and picking the top several. You've got to pick those where the Divi will be maintained, and grow preferably. Obviously as far as a pension is concerned, you don't want 9% this year and 0% next.I'm afraid now indexed linked gilts are out of the picture, you have to accept the lower yeilds available on FTSE 100 Imv, unless you still want to chase high risk stuff ( risk of capital and income).Another thing where I divert from conventional thinking is the capital protection. After provision for the Mrs and kids, any capital left wants to be zero on the day you die. Spend it on wine women and song, and fritter the rest away (thanks George).

[adejuk] 11/5/2021 09:00

sirrux
agree !

[woodhawk] 11/5/2021 08:24

Doesn't need to be that risky, M&G (spun-off from the Pru)currently yielding well over 8%.

[williamcooper104] 11/5/2021 08:18

RECI gives you an 8 yield They do commerical real estate lending (towards the riskier end of lending/hence the return, but they've a great track record and don't use too much debt to get their returns)

[sirrux] 11/5/2021 07:39

L&G pension advice thread, love it.

[rcturner2] 11/5/2021 07:28

Another guy I have worked with occasionally who is a lawyer who the client bought in on a case I was chatting to and earns 6 figures. He asked my advice on pension matters so I basically explained to him the HMRC rebate and how I have a SIPP etc. He did not know how much he was paying into his pension, nor how much was in the fund, or when he could retire on how much. When he eventually went through his paperwork to find out these things I tried to explain to him the personal allowance taper and that at say (£112k salary, £10k pension contribution) it would be advantageous to top up the pension to take the gross to £100k and he literally could not understand it and quite clearly regarded anything involving maths as beyond him.

[rcturner2] 11/5/2021 07:23

I know a guy mid 40s (partner of wife's friend) who is a partner in a recruitment firm drives a nice motor, wears smart suits, nice house, good income. He actually has negative assets through his own terrible financial conduct of basically spending everything he earns and racking up debts all over the place.

It is amazing to me how many professional people are financially illiterate.

[i like beer] 11/5/2021 07:23

Stcm (cement producer) delivers a nice yield. Small co but very cash generative and share price has been increasing recently. Should be debt free now so could increase divi even more.

[spawny100] 11/5/2021 07:16

Cassini out of interest which divi stocks were you suggesting to your friend to get a 9% return? I have MNG, DGOC and POLY but there's not many around returning those sort of numbers are there? I've done quite well in last few years with small growth companies to build a fair pot and now want to move into safer income stocks. I'm only 48 and was a gardener but I've just had 3 hip operations in 4 years with the final one being a total replacement. I'm not sure what gardening I'll be able for once recovered so am trying to get a passive income stream. Thanks in advance.

[ianguerin] 11/5/2021 07:06

When considering SIPP's, think about one for your spouse/partner instead of loading up your own to the extent that the LTA is exceeded. If the LTA is exceeded, you can transfer the accumulated SIPP into a drawdown pension in tranches, & only the accumulated value of the tranches is measured against the LTA - in technical terms there are multiple Benefit Crystallisation Events (BCE's).
For those in a defined benefit scheme & likely to exceed the LTA, do the fund rules permit you to take a reversionary pension, which enables you to give up part of your pension in return for an enhanced surviving spouse pension ? Giving up £1,000 pension reduces the LTA impact by £20,000, & might generate £5,000 extra surviving spouse pension. Better to let go £1,000 in favour of your spouse than to pay £11,000 (55% tax on the £20,000 LTA excess) to HMRC?

DYOR

[williamcooper104] 10/5/2021 19:18

That's so true; it's why annuities will always be around, most people can't and even if they can don't want to manage their moneyCan think of a good friend whose a fantastic businessman in the wheeling/dealing fashion but who has had to lock money away in a trust so that he can't gamble it all away

[williamcooper104] 10/5/2021 19:14

Or rather to join in on the middle man confiscatory fun; and nothing's better than owning annuities

[imastu pidgitaswell] 10/5/2021 16:50

"to try and cut out the confiscatory middle layer"

Although oddly enough, the middle man is (amongst others) Legal and General, the subject of this thread...

😉

[imastu pidgitaswell] 10/5/2021 16:20

Good points - mine is technically private, but it's sort of in between - the USS. The biggest DB pension scheme (with real assets) in the country. Unfortunately with real liabilities too.

It is in a real funding dilemma at the moment, but having just left, I'm only taking the DC element out for the moment - which is proving painful enough. The DB transfer multiple is pathetic - less than 20. The whole scheme is still in 1977 or similar in terms of its functioning.

[williamcooper104] 10/5/2021 16:10

Only caveat on defined benefit is that you are taking the credit risk of the scheme sponsor - no problem if thats the government, big problem it its BHS The governments pension rescue fund pays out benefits capped at an amount (can't remember the amount but don't think it's that high) So if you are a high earner you might be better of transferring some of your DB scheme out to reduce the credit risk

[yachtmaster2] 10/5/2021 16:07

Unfortunately total pension in 2014 was about 1.3 then a couple of hundred grand short of the 2014 fixed protection. I can’t complain though. I sold my business two years ago and was surprised to learn I only had to pay 10% tax on the gain after thirty years under the entrepreneurs allowance which was nice unlike the solicitors bill which was around 20K.

[imastu pidgitaswell] 10/5/2021 16:05

Put it another way - if had been DC, then the benefit (however inadequate) your earned pension up to when you left would have given you would have decreased since then, as the cost to buy the benefits increased. But because it is a DB scheme, it hasn't.

[imastu pidgitaswell] 10/5/2021 16:03

So it is actually a defined benefit scheme, if not a final salary scheme.

When people refer to 'gold plated' they tend to mean that it is a defined benefit pension you will receive, with inflation and surviving spouse benefits etc. To buy that with a pension pot (which is what you have with a defined contribution scheme) costs (typically) something like 40 times the initial benefit at 65. That multiple is going up all the time thanks to quantitative easing and the impact on gilt rates. But if you are a defined benefit member that is not your problem, but the employer's (subject to some discussions about levels of employee contributions increasing).

Basic story - defined benefit (whether career average or final salary) is far better for the regular employee than defined contribution.

[uppompeii] 10/5/2021 15:28

Yacht master, have you checked whether you can backdate your LTA to a higher limit?I applied and got mine protected at 1.5m which from memory was the 2014 figure before the subsequent reductions.

[williamcooper104] 10/5/2021 14:07

And of course give me a penal LTA tax charge any day over an annuity - with effectively a 100 percent end of life tax

[williamcooper104] 10/5/2021 14:03

I think the only thing to be aware of is that once you are over the LTA there's no point making any more cash contributions to your SIPP But as you say if you then go much further over due to performance then while the incremental tax burden is high you are still better of than otherwise When you are over the LTA you probably just want a portfolio that will track inflation with the least possible amount of risk (something easier said than done of course; and in practise if you've been making money investing then maybe worth just sticking with the investment style you know best)

[marktime1231] 10/5/2021 13:59

One of the feautures of the LTA is that it is only tested when certain events occur like applying for a transfer or on hitting an age target I think at 75. So you could be sitting on nominal value well in excess of the LTA without HMRC knowing it, and without immediately incurring penalties. And as the man of the telly says shares can go down as well as up, so another crash might see you back under the LTA.

You have done well to enjoy surging growth in the value of your pot, as has everyone who bought the dip in March 2020, riding the recovery in value stocks and minerals, or by successful speculation. Well done again for seeing that you might be heading for an LTA problem. If the pot is in your control or if your pension scheme manager is alert, one way to avoid breaching the LTA is to shift investment strategy ... putting accrued gains into cash-equivalents for example to stop the risk of more good growth taking you over the LTA. And / or you can stop contributing to the pension and instead each year put similar sums (net) towards an ISA scheme. Or other diversifying investments.

I have absolutely no objection to people taking full advantage of legimate tax breaks and relief available, paying as little tax as possible is efficient.