How to withdraw from Hargreaves Lansdown

Yield is simply the amount of dividend that is paid per year as a percentage of the current share price.

However, the "total return" you get from investing into a fund over a year (or five) is the overall total of the dividend paid and the amount by which the value of the shares goes up. More accurately, the total improvement of your wealth that you would get if you invested at the beginning of the period and every time you got a dividend, you re invested it in buying more shares in the fund.

Some of the total comes from the natural income paid by the shares and bonds that the fund hold (the yield) and some of it from the fact that the company shares or bonds might be getting more valuable over time. For example, Amazon and Facebook and Tesla aren't paying their owners much in the way of dividends at all - however one of them is the most valuable retailer in the world, another is the most valuable social media empire and the other is pretty much the most valuable car company, and shares in all of them have gone up on value phenomenally in the last few years.

If you need to draw an income (eg in retirement) it might be convenient to invest in a mix of equities and bonds that is somewhat biased to the ones that pay a higher level of dividends or interest, so you get a convenient high level of income which you can draw off, without having to sell shares in the fund to get your hands on the other profits you're making by way of capital gain.

However, that would involve focusing on only buying shares or bonds that paid relatively high levels of income and so would necessarily avoid the Amazons or the Facebooks etc. VLS uses stock market indexes so does not try to select individual stocks, it just takes whatever the indexes give it. It is not designed to be high yield or low yield, it just yields what it yields.

*Edit
As an aside, the Jupiter Merlin Balanced fund has given an overall return of over 70%, in the five year period to the end of last week. However, your friend or relative didn't buy 1800 shares of it five years ago at £1 a share and wait patiently for it to go up to £1.70 a share. Instead, they will have bought at a range of prices over the time period. For example if you buy 500 shares at £1 each and 300 at £1.33 and then later buy another 1000 at £1.50, then in total you've spent £2400 on 1800 shares which is something like £1.33 average purchase price per share even though some cost less and some cost more as the price went up over time.

Then when the price is a little over £1.70 today you've made on average 29% profit or whatever, but that doesn't mean the fund has gone up "only" 29%. Really it went up 70% but your particular holdings bought at a somewhat middling price whenever you happened to have cash available, have only done 29% across the five years - as you didn't stick all the money in at the relatively cheap prices of five years ago.

You are right that 29% or 70%, however you look at it, are both nice levels of return, but context is needed (how much other funds of similar risk levels would have achieved in the same economic conditions). I wouldn't expect the same again from the same fund over the next five.

Well, assuming they're only putting £17 a month (net of tax) in for ten months this year, that's £170, plus about 10450 from their HL account after closure fees, that's 10620 total which the taxman would kindly gross up to £13275.

So if he/she has a gross salary of about £27k and is only putting £13275 of it into a pension, they are still about 13725 short of putting their entire salary into the pension (the most you're allowed to do), so are completely fine.

That's assuming they aren't getting an addition to their pension value of over about £26725 from their employer this year, because you can't go over £40k in a tax year between yourself and your employer unless you have spare carry-forward allowance from recent previous years (if you were in a pension scheme but contributed way under your limit, you can carry the limit forward a few years). But it sounds like they're probably not the sort of person getting over £20k of pension contributions a year from their employer.

An obvious point to make (but I'll make it anyway) is that if they only bother to contribute £17pm a month through their working life they are not going to be able to draw on it for very long in retirement. Unless they fancy living on a few pounds a month for four decades it will be pretty miserable. So it's good that they're diverting some of their investments into a pension but they should aim to put more in on a monthly basis, especially if they're playing "catch up" compared to other people.