Latest news with #SIPP
Yahoo
17 hours ago
- Business
- Yahoo
If I could only save one UK share in my SIPP, here's what it would be
No investor should gamble their future on just one UK share. That would be an almighty risk. My self-invested personal pension (SIPP) holds around 20 different stocks. While I would happily junk two or three of them (I'm looking at you Aston Martin, Glencore and Ocado Group), binning the rest would be painful. But let's say somebody put a gun to my head. Which would be the sole survivor? There are some stocks that investors might buy if they knew in advance they could only hold one. Utility stock National Grid is seen as a solid dividend growth play, but I don't actually hold it. Consumer goods giant Unilever has both defensive merits. I did hold that, but recently banked a profit as I was underwhelmed by its growth potential. So what about the stocks I do hold? Which would I save? I'd hate to sell private equity specialist 3i Group, which has doubled my money in 18 months. It's had a great run though, and looks a little bit too expensive, so it would have to go. I'd also hate to offload insurer Phoenix Group Holdings, whose shares are up 30% in a year, and still yield a bumper 8.3%. It's a happy day when the Phoenix dividend hits my SIPP, and the same applies for rival FTSE 100 wealth manager M&G. Another super-high yielder. Yet both would have to go. If those dividends are cut at any time, the investment case could collapse. I don't think they will, but the stakes are high here. I'd also offload my SIPP growth stock stars Rolls-Royce Holdings and BAE Systems. They've done brilliantly, but remember, I can only hold one stock here. I'd bank my profits on both to make way for last stock standing, Lloyds Banking Group (LSE: LLOY). I bought the high street bank on three occasions in 2023, and it's been the surprise over-achiever in my portfolio. I hoped for modest share price growth. Instead, Lloyd shares are up 40% in a year (and 72% since I bought them). Once my reinvested dividends are added, my total return is almost 100% in 18 months. Lloyds is now almost entirely focused on the UK domestic market, which makes it a play on our economic fortunes. There are good sides to that – but also bad ones. The UK economy isn't exactly thriving right now, while inflation remains a menace. Mortgage rates have actually been rising again in recent weeks, which could further squeeze house prices, and slow demand. Lloyds has also had to set aside hefty sums for potential debt impairments, and could be on the hook for a billion or two, following the motor finance mis-selling scandal. But despite its strong run, the Lloyds price doesn't look over valued, with a price-to-earnings ratio of just over 12. The forecast yield of 4.4% should keep the income flowing. Especially since it's covered 2.1 times by earnings. The bank is also running a hefty £1.7bn share buyback. Lloyd will have its ups and downs and like I said, I would be crazy to go all in on just one stock. But if I had to do it, this would be the one. The post If I could only save one UK share in my SIPP, here's what it would be 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 3i Group Plc, BAE Systems, Lloyds Banking Group Plc, M&g Plc, Phoenix Group Plc, and Rolls-Royce Plc. The Motley Fool UK has recommended BAE Systems, Lloyds Banking Group Plc, M&g Plc, National Grid Plc, Rolls-Royce Plc, and Unilever. 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 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
3 mistakes to avoid when investing a SIPP
A pension is a very important thing, but for much of our working lives (let alone before) we may not give it nearly as much thought as it deserves. Take a Self-Invested Personal Pension (SIPP), for example. Given its long-term nature, it can be tempting when times are busy to put off thinking about it or investing the money in it. But that can be a costly mistake once retirement rolls around. Here are three mistakes I aim to avoid when investing my own SIPP. We know from past experience that the economy will keep evolving. Some shares that are barely known and perhaps even trade for pennies today could turn out to be worth a fortune a decade or two from now. Sometimes, that fear of missing out leads people to rush into shares they do not understand in case they shoot up in value before they have seized the opportunity. That is not the sort of prudent, considered investment I want for my SIPP; it is speculation. I try to avoid the mistake of investing in the 'next big thing' unless I understand it. Of course, one's circle of competence is not static – it is possible to learn about an emerging industry that may sound promising, like renewable energy or biotech. Does this sound like a problem to you? Warren Buffett invested tens of billions of dollars in Apple stock. It did so well that not only did the stock soar in value by tens of billions of dollars, it came to represent by far the largest part of Buffett's company Berkshire Hathaway's portfolio of listed shares. It may not sound like a problem. As billionaire Buffett is still working at 94, his pension may not be a big concern to him. But Buffett knows what every SIPP investor ought to remember: you can have too much of a good thing. The tech giant remains Berkshire's largest shareholding, but share sales mean it no longer dominates the portfolio to the same extent. Many investors like the idea of buying dividend shares that can tick over quietly in their SIPP, compounding income for decades. I am one of them. But it is always important not just to look at the current dividend yield of a share. One must consider the prospective future yield, based on potential future free cash flows. Take Imperial Brands (LSE: IMB) as an example. Like many tobacco companies, it is a free cash flow machine. In the first half of this year alone, it generated operating cash flows of £1.5bn. Now, it saw £0.2bn of investing-related cash outflows. It also saw £0.3bn of finance-related cash outflows. But it paid over £1bn of dividends, most of it to shareholders. If it had not chosen to spend £0.6bn on buying back its own shares, Imperial's cash flows would comfortably have covered dividends and left money to spare. So far, so good. Longer term, though, cigarette use is declining. Tobacco volumes fell 3% year on year. The firm has pricing power but in the long term I fear free cash flows could fall and lead to a dividend cut. I once owned Imperial Brands shares in my SIPP – but no more. The post 3 mistakes to avoid when investing a SIPP 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 recommended Apple and Imperial Brands Plc. 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
Yahoo
2 days ago
- Business
- Yahoo
Investing in a SIPP? These are the 5 most popular active funds
Building a large nest egg with a Self-Invested Personal Pension (SIPP) can be quite a daunting task. Picking individual stocks requires a more hands-on approach and risk-taking that not every investor is comfortable with. Instead, most retirement investors seeking to beat the market tend to rely on actively managed investment funds. There's a lot to like about taking this approach to investing. All the hassle of picking stocks and portfolio management is handed off to a professional. And thanks to insights from Hargreaves Lansdown, we know which funds have proven to be the most popular among British SIPP investors. The top five most popular actively managed funds bought by SIPP investors are: HL Multi-Index Moderately Adventurous Royal London Short-Term Money Market Baillie Gifford American Fund B Vanguard Sterling Short-Term Money Market Fidelity Cash Fund W Despite their popularity, these active funds haven't been stellar performers of late. In the last 12 months, all five have generated a positive return. Yet the best performance hasn't been all that groundbreaking. The average return across all five is just 8.3% before management fees. Baillie Gifford American is the standout performer, achieving an impressive 21% gain since June last year. But when zooming out the last five years, investors have only reaped a 6.2% total return. By comparison, the FTSE 100 over the same period is up by 35%. And index tracker funds charge significantly lower fees. Actively managed funds are often criticised for their lack of consistent market-beating returns once managers take their fee. And index funds, on average, tend to outperform active funds. But sadly, these also have the downside of closing the door to any possibility of market-beating returns. This is why prudent stock picking, in my opinion, continues to be the best option for long-term DIY investors. Take a look at one of the FTSE 100's largest companies – RELX (LSE:REL). This is a mature data analytics provider to critical sectors and departments such as science, law, business, healthcare, and risk management, among others. Revenue and earnings growth may not be very explosive. However, the firm's ability to consistently generate free cash flow from its subscription revenue model, paired with the rapid integration of artificial intelligence (AI), has enabled the business to outperform. And this has translated into a near-110% return since June 2020 before even accounting for dividends – more than three times a passive index fund. Of course, not all UK stocks have performed as strongly during this period. And even a seemingly high-quality company like RELX has its weak spots. Free AI tools like ChatGPT and Gemini already offer competing research analysis solutions. And if RELX's own AI tools can't stay ahead of the innovation curve, it may struggle to maintain its pricing power in the long run. There's also a risk of national budget sensitivity to consider. Many of RELX's customers are universities and research groups reliant on government grants and funding. So any cuts to public spending can potentially throw a spanner into the firm's growth plans. Despite these risks, RELX's outlook still looks promising, in my opinion. Therefore, investors may want to consider taking a closer look at this business as a potential long-term addition to their own SIPPs. The post Investing in a SIPP? These are the 5 most popular active funds 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 Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. 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 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
3 days ago
- Health
- CBS News
How medical debt impacts your credit (and what you can do about it)
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. If you're dealing with unpaid medical debt, it could hurt your credit — but there are ways to resolve the today's healthcare landscape, even a brief hospital visit can leave behind a mountain of bills. And with insurance not always covering everything — or in some cases, anything — many Americans are left grappling with medical debts they never expected to face. In 2024, about 20 million Americans, or nearly 1 in 12 adults, owed money for medical debt, according to the Survey of Income and Program Participation (SIPP) survey. The impact of this type of debt can be more than financial, though. Medical debt often hits during a time of personal crisis — after an accident, illness or surgery — leaving people emotionally overwhelmed and financially vulnerable. And when those bills go unpaid, the stress can compound as collections calls start and credit scores begin to slip. For many, this debt is not the result of overspending or poor budgeting, but simply the price of getting necessary care. Luckily, recently updated credit reporting rules and a range of relief programs are starting to ease the burden for many patients. But it's still important to understand exactly how medical debt affects your credit and what steps you can take to protect yourself. Find out how to get help with your debt problems today. How medical debt impacts your credit Medical debt used to be one of the quickest ways to damage your credit score. Even small unpaid bills could end up in collections and drag down your credit for years. But relatively recent changes from the three major credit bureaus — Experian, TransUnion and Equifax — have shifted how this type of debt is handled. Here's what changed: Paid medical collections no longer appear on credit reports. If you settle or pay off your medical debt, it should no longer hurt your credit, even after it goes to collections. If you settle or pay off your medical debt, it should no longer hurt your credit, even after it goes to collections. There's now a one-year waiting period. Medical bills sent to collections won't be added to your credit report for 12 months, giving you time to resolve them or work out a payment plan. Smaller debts are excluded. Medical collections under $500 no longer appear on credit reports at all. These reforms mean that unpaid medical bills might not damage your credit as quickly or as severely as they once did. Still, if a large medical balance goes unresolved for too long, it can eventually show up on your report and lower your credit score, especially if you don't take action during that one-year grace period. It's also important to know that while medical debt is handled differently than credit card or loan debt, lenders don't necessarily make that distinction. A collection is a collection, and any mark on your credit report can impact your ability to get approved for a loan, rent an apartment or even land certain jobs. Explore your debt relief options with the help of an expert now. What you can do about your medical debt If you're struggling with medical debt, you have options. Taking action sooner rather than later can help you avoid collections and limit the potential damage to your credit score. Here are some strategies worth considering: Review and negotiate your bills Start by carefully reviewing every bill for errors or duplicate charges. Medical billing mistakes are surprisingly common. If something doesn't look right, call the provider or hospital's billing department and ask for an itemized statement. Once you verify the charges, see if the provider will negotiate. Many are willing to offer discounts for prompt payment, set up interest-free payment plans or even reduce what you owe if you demonstrate financial hardship. Apply for financial assistance Nonprofit hospitals are legally required to offer financial assistance programs to eligible patients. If you're low-income or facing financial hardship, you may qualify for partial or full forgiveness, even if the bill has already gone to collections. Ask your provider's billing office for an application. Consider a debt relief program If your medical debt is substantial or you're juggling multiple types of unsecured debt, a debt relief program, like debt settlement, may be worth exploring. Debt settlement programs work by negotiating with your creditors to settle your debts for less than the full amount owed. There are also debt relief programs that consolidate your debts into a single monthly payment, which can make them easier to manage. Keep in mind, however, that while debt settlement can help resolve medical collections, it may come with risks, such as fees, tax implications and temporary credit score drops, so it's important to work with a reputable provider and understand the trade-offs. Monitor your credit Your credit report should reflect any paid or settled medical debts accurately, but that may not always be the case. So, be sure to check your credit report regularly to ensure no incorrect medical collections are listed. If you spot an error, dispute it with the credit bureau directly. The bottom line Medical debt can feel uniquely unfair, as it often comes out of nowhere and hits when you're least prepared. But while it has the potential to hurt your credit, changes in how this debt is reported now offer more breathing room. You still need to act quickly and proactively, but there's a path forward even when the bills seem insurmountable. From negotiating with providers to seeking financial aid or working with a debt relief program, there are ways to tackle medical debt without wrecking your financial future. So, know your options and use the time you have before those bills end up on your credit report to tackle the issue before it compounds.
Yahoo
01-06-2025
- Business
- Yahoo
This stunning dividend share yields 8.8% and is trading at a 35% discount!
Phoenix Group Holdings (LSE: PHNX) is fast turning into my favourite FTSE 100 dividend share. What took it so long? I tracked the stock for years before finally adding it to my Self-Invested Personal Pension (SIPP) in January 2024. The yield was around 10% and the valuation looked dirt cheap, trading at six or seven times earnings. I assumed something must be wrong. Maybe the dividend wasn't sustainable, and a cut was coming. But that didn't happen. So I looked deeper and discovered Phoenix had increased its dividend in eight out of the previous 10 years. The only cut was during the 2020 pandemic, and that's forgiveable. It had a strong balance sheet, was generating solid cash flow, and the board insisted that it operated 'a progressive and sustainable dividend policy'. It still says that today. The dividend still looks secure. Phoenix lifted its total 2024 payout by 2.56% to 54p per share. Analysts now forecast 56p this year, a 3.7% rise. The yield is forecast to hit 8.8% in 2025 and 9.05% in 2026 – more than double what a top savings account offers. Of course, savings are safe. Dividends aren't. The flipside is that dividend stocks have growth potential too. The Phoenix share price is up an impressive 30% over the past year. That means a total return close to 40%, including the dividend. That's impressive, but I'm not getting carried away. The stock is still trading around the same level it was five and 10 years ago. So much for past performance. What happens next? Phoenix expects to generate £1.1bn of excess cash between 2024 and 2026. Much of that will go towards paying down debt, but some will wend its way to me, via dividends. On 21 May, Citi upgraded Phoenix from Neutral to Buy, lifting its price target from 537p to 730p. That's 14.5% above today's 637p. Add the dividend, and my potential 12-month return could hit 25%. If forecasts play out, that is. In practice, they're merely educated guesses. Citi said Phoenix is changing. No longer just a back book consolidator, it's also building a bulk annuity franchise and is strengthening its retirement savings business. The broker reckons the 9% yield 'seems very well supported' and expects the shares to close their 35% valuation gap versus peers. It would be nice if that all came good. Phoenix does face risks, though. The bulk annuity market is getting crowded and rivals are more established. Insurance is a mature and competitive business, where growth doesn't come easy. Today's 8.44% yield is the third-highest on the FTSE 100. But dividend stocks still face competition from cash and bonds, which yield less but offer more safety. That may change when interest rates fall — but maybe they won't? I've enjoyed the share price growth but the yield remains the main attraction here. Phoenix may soon rebrand as Standard Life but whatever it brands itself, I'm a fan. In fact, I'm even considering buying more. The post This stunning dividend share yields 8.8% and is trading at a 35% discount! 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 Phoenix 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 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
