If you’ve spent any time looking at the FTSE 100 lately, you know it’s been a weird few years. But through the noise, one name keeps popping up in every "steady Eddie" conversation: Legal & General. Honestly, the Legal & General Group plc share price is basically a barometer for how the UK’s massive pension and insurance machine is feeling.
Right now, as we sit in early 2026, the stock is hovering around the 266p mark. It’s been a decent run recently. Over the last three months, we’ve seen a double-digit jump of about 10.6%, which is pretty punchy for a company that most people think of as a slow-moving giant. But don’t let that "boring" reputation fool you. There is a lot moving under the hood here, especially with the new leadership fully settled in and the global pension market hitting a fever pitch.
The Simões Effect: A Sharper, Slimmer L&G
When António Simões took the reins as CEO, he didn’t just sit on his hands. He brought in a "simpler and better-connected" strategy that is finally starting to show up in the numbers. Basically, they’ve been pruning the hedges. They sold off the US protection business and shook hands with Meiji Yasuda in a deal worth roughly $2.3 billion.
Why does this matter for the share price?
Because the market loves focus. For years, L&G was a bit of a sprawling octopus. Now, they’ve consolidated into three core pillars: Institutional Retirement, Asset Management, and Retail. By dumping non-core assets like the CALA housebuilding business back in late 2024, they’ve freed up capital to do what they do best: managing massive pension pots.
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Institutional Retirement is the Real Engine
This is the "Pension Risk Transfer" (PRT) business. It sounds technical, but it’s actually pretty straightforward. Large companies have massive pension liabilities they don't want to manage anymore. They pay L&G to take those off their hands.
L&G is a beast in this space. In the first half of 2025 alone, they wrote over £5 billion in global PRT volumes. The pipeline for 2026 looks even bigger. Industry experts at LCP are predicting that UK buy-in volumes could hit a record £55 billion this year. L&G is sitting right at the front of that queue with a "store of future profit" (which they call the Contractual Service Margin) of over £12 billion.
That Dividend Yield: The 8% Elephant in the Room
Let’s be real. Most people buying L&G aren’t looking for a "moon mission" stock. You’re here for the dividend.
Currently, the dividend yield is sitting at a juicy 8.1%. That’s massive. To put that in perspective, while your high-street savings account might be offering you 3% or 4%, L&G is basically doubling that.
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They’ve committed to returning over £5 billion to shareholders between 2025 and 2027 through a mix of dividends and share buybacks. They’ve already finished about 90% of their most recent £500m buyback program. The plan is to grow the dividend by about 2% annually out to 2027. It’s not explosive growth, but it’s predictable. In a world where everything feels a bit chaotic, "predictable" is a luxury people are willing to pay for.
Analyst Ratings: A House Divided?
Interestingly, the experts aren't all in total agreement. While the median price target is around 252p—which is actually a bit lower than the current price—some analysts are much more bullish, with high-end estimates reaching up to 340p.
The "hold" camp (which makes up about 57% of recent ratings) is worried about the high payout ratio. They wonder if L&G can keep up the 8% yield if the economy takes a sudden dive. But the "buy" camp looks at the 217% Solvency II coverage ratio and thinks, "They’ve got plenty of cash in the basement."
What Most People Get Wrong About L&G
One of the biggest misconceptions is that L&G is just a UK insurance company. That’s old-school thinking.
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They are increasingly a global asset management powerhouse. Their private markets business, which invests in things like real estate and infrastructure, grew its assets under management (AUM) by 14% to £65 billion recently. They’ve even partnered with Blackstone to beef up their credit platforms.
This shift is crucial because asset management earnings are often "stickier" and more profitable than traditional insurance underwriting. It’s a move toward fee-based earnings, which the market tends to value higher than insurance premiums.
Risks to Watch Out For
It’s not all sunshine and high yields. Here are the things that keep L&G investors up at night:
- Interest Rate Volatility: Changes in rates affect the valuation of their massive bond portfolio.
- Credit Risk: They hold a ton of corporate debt. If we see a wave of defaults, that hurts the balance sheet.
- Climate Change: The PRA (Prudential Regulation Authority) has been breathing down the necks of insurers lately about climate-related financial risks. L&G is pushing hard on ESG, but the transition is expensive.
The Verdict: Is It Worth It?
If you’re looking for a company that’s going to triple in price by next Christmas, you’re in the wrong place. But if you want a business that is essentially a toll booth on the global retirement highway, the Legal & General Group plc share price offers a lot of value.
The valuation is still relatively modest compared to some of its global peers like Allianz or Zurich, especially when you factor in the high return on equity (forecasted to be very high over the next three years).
Actionable Next Steps for Investors
- Check the Payout Sustainability: Look at the "Operational Surplus Generation." As long as they are generating more cash than they are paying out in dividends, that 8% yield is safe.
- Monitor the PRT Pipeline: Keep an eye on the RNS (Regulatory News Service) for big "bulk annuity" deal announcements. These are the lifeblood of the share price growth.
- Diversify Your Income: Don't put your entire "income" portfolio into one insurer. Even though L&G is a leader, pairing it with something like a global infrastructure fund can balance out the sector-specific risks.
- Watch the March 11 Results: L&G is scheduled to report its full-year 2025 results on March 11, 2026. This will be the big moment to see if Simões’ strategy is actually hitting the targets he set.
Basically, L&G is a "slow and steady wins the race" play. It’s about as institutional as it gets, and for many, that’s exactly why it belongs in a long-term portfolio.