- Legal & General increased its interim dividend by 2% after reporting stronger-than-expected first-half earnings and raising its full-year outlook.
- Core operating profit rose 7% to £918 million, driven by strong growth in asset management and pension risk transfer activity.
- The insurer remains on track to return more than £5 billion to shareholders through dividends and share buybacks between 2025 and 2027.
Legal & General (LSE: LGEN) reported stronger-than-expected first-half results on Wednesday, raising its interim dividend and improving its full-year earnings outlook as growth in asset management and pension risk transfer continued to support profitability.
The FTSE 100 insurer increased its interim dividend by 2% to 6.24 pence per share, extending its long-standing commitment to shareholder returns. The company also confirmed it has completed around £450 million of its planned £1.2 billion share buyback, with total shareholder distributions expected to exceed £5 billion between 2025 and 2027.
Legal & General beats earnings forecasts
Legal & General reported core operating profit of £918 million, up 7% from a year earlier and ahead of analysts’ expectations. Core operating earnings per share increased 11%, prompting management to raise its full-year guidance above the upper end of its previous 6% to 9% growth target.
The company also generated £790 million in Solvency II capital during the first half, while maintaining a strong 201% Solvency II coverage ratio, comfortably above its long-term operating target.
Chief Executive António Simões said the results demonstrate that the company’s strategy to become a “simpler, more focused” business is delivering improved profitability and sustainable shareholder returns.
Asset management and pensions remain key growth drivers
The strongest performance came from Legal & General’s asset management division, where fee-related earnings jumped 37% as higher client inflows and improved operating efficiency boosted profitability. Assets under management reached £1.2 trillion, including £79 billion in private markets, while the cost-income ratio improved to 71%.
Institutional Retirement also continued to perform strongly. The company reported £5.7 billion of global pension risk transfer transactions written or under exclusivity by the end of July, reinforcing its leadership in one of the UK’s fastest-growing retirement markets.
Meanwhile, Workplace Pensions continued to expand, with assets under administration increasing 27% to £128 billion, while total UK defined contribution assets under management reached £236 billion.
Shareholder returns remain a priority
Alongside stronger earnings, Legal & General reaffirmed its commitment to returning capital to investors. The insurer said earnings growth and capital generation continue to improve dividend cover, supporting sustainable future dividend growth. The ongoing share buyback is also expected to enhance earnings per share while reducing the number of shares outstanding.
Income investors continue to view Legal & General as one of the FTSE 100’s highest-yielding dividend stocks, although future dividend growth will depend on continued earnings expansion and capital generation.
Why investors are watching Legal & General shares
Legal & General shares remain in focus as investors assess whether the insurer can continue delivering attractive shareholder returns while growing earnings. The company has long been regarded as one of the FTSE 100’s leading income stocks thanks to its consistent dividend policy, strong capital position and exposure to growing retirement and asset management markets.
With management now forecasting full-year earnings growth above its previous target range and reaffirming its commitment to shareholder distributions, analysts will be watching upcoming pension risk transfer activity, assets under management and capital generation for further signs that the company’s long-term growth strategy remains firmly on track.
Legal & General outlook
Legal & General enters the second half of 2026 with positive momentum after raising earnings guidance and delivering strong growth across its core businesses. Management expects full-year earnings growth to exceed previous targets, supported by expanding pension risk transfer activity, improving asset management profitability and continued operational efficiencies. Investors will also watch the progress of the remaining £750 million share buyback and the company’s ability to sustain dividend growth while executing its long-term transformation strategy.
The company increased its interim dividend by 2% after reporting stronger first-half earnings, improved capital generation and confidence in its long-term cash flow outlook.
Growth was led by its asset management business, higher pension risk transfer volumes and continued expansion in workplace pensions.
Yes. The company has completed approximately £450 million of its planned £1.2 billion share buyback programme and expects to return more than £5 billion to shareholders through dividends and buybacks between 2025 and 2027.