Legal & General’s 2025 numbers: steady growth, fatter margins, and a record £1.2bn buyback
Legal & General has delivered a solid set of 2025 full-year results, paired with a punchy capital return. The headline: core operating earnings per share (EPS) up 9%, a record £1.2 billion share buyback kicking off this week, and the dividend moving up 2% to 21.79p. Management is leaning into L&G’s strengths in pension risk transfer (PRT), retail retirement, and asset management – and the numbers back that up.
Below, I’ll unpack the key figures, explain the jargon, and give my take on why this matters for shareholders.
Headline financials investors should care about
| Metric | 2025 Result | Comment |
|---|---|---|
| Core Operating Profit | £1,623m | Up 6% |
| Core operating EPS | Not disclosed (growth) | Up 9% |
| IFRS Profit Before Tax | £807m | Reported under accounting standard IFRS 17 |
| Solvency II Operating Capital Generation (OSG) | £1.5bn | Up 5% |
| OSG per share | 26.78p | Up 8% |
| Pro forma Solvency II coverage ratio | 210% | Capital strength; note [3] applies |
| Store of future profit | £13.3bn | CSM £12.4bn, up 2% |
| Share buyback | £1.2bn | Starting this week |
| Dividend per share | 21.79p | Up 2% |
Quick definitions: Solvency II coverage ratio is a measure of balance sheet strength; above 100% is covered, 210% is very robust. The “store of future profit” refers to the Contractual Service Margin (CSM) and Risk Adjustment under IFRS 17 – essentially profits to be released over time as policies run off. OSG is the capital generated by the business, a key metric for funding dividends and buybacks.
Capital returns: why the £1.2bn buyback and dividend rise matter
The buyback is the standout. Management says the £1.2 billion programme, together with guided 2% dividend per share growth this year, will bring planned returns to shareholders to £2.4 billion over the next year. Over 2025-2027, L&G expects to return more than £5 billion.
My view: this is a strong signal of confidence in recurring capital generation. The pro forma Solvency II coverage ratio of 210% (note [3] says it allows for the Meiji Yasuda transaction and a related £1 billion buyback) suggests ample headroom to fund both growth and distributions. The combination of a higher dividend and a sizeable buyback should support per-share metrics.
Business lines: where the growth is coming from
Institutional Retirement – defined benefit deals keep flowing
- Global PRT volumes: £11.8bn, with £10.4bn in the UK.
- PRT (pension risk transfer) is where insurers take on pension scheme liabilities for a premium. It’s capital-intensive, but L&G is a leader here.
What I like: this is a deep, structural market with strong UK volumes and growing international momentum. L&G also says around 80% of UK PRT volumes over the last three years were done with long-standing clients from Asset Management – that cross-sell flywheel is working.
Asset Management – fee margin ticking up, private markets scaling
- Assets under management (AUM): £1.2 trillion globally.
- Private Markets AUM: £75bn, up 32%.
- ANNR: £34m (annualised net new revenue), and average fee margin expanded to 9.1bps.
Why it matters: fees and flows are the lifeblood of asset managers. Seeing fee margins expand and ANNR positive, alongside a bigger private markets book, supports the CEO’s point that the business is at an inflection. The synergy with pensions and retail retirement is clear – annuities and workplace assets are helping underpin Asset Management revenues.
Retail Retirement and Workplace – capturing the DC opportunity
- Retail Annuities volumes: £1.8bn.
- Workplace defined contribution (DC) assets under administration (AUA): £114bn, up 21%, with net flows of £6.2bn.
- A further £3.7bn of assets won to onboard in 2026.
- 15% increase in Workplace members taking out an L&G annuity.
Takeaway: this is exactly the strategic join-up you want to see – members saving through Workplace DC rolling into L&G annuities at retirement. It lowers acquisition costs, improves persistency, and feeds Asset Management with stable assets. Operating leverage from tech and service improvements should help margins over time.
The balanced view: strengths and watch-outs
- Positives:
- Per-share growth is moving the right way: core operating EPS up 9%, OSG per share up 8%.
- Balance sheet resilience with a 210% Solvency II coverage ratio supports ongoing distributions and new business.
- Clear evidence of synergy across PRT, Retail, and Asset Management – that’s a durable competitive edge.
- Private markets scale-up and fee margin expansion in Asset Management suggest improving earnings quality.
- Watch-outs:
- IFRS profit before tax is £807m; IFRS 17 can create volatility versus underlying economics, so focus on core operating metrics.
- PRT and annuities are capital-intensive; execution discipline remains key even with strong coverage.
- Some figures are directional only (e.g., EPS growth without the absolute pence disclosed), so we’ll need fuller detail in the presentation pack.
Dividend timetable and investor logistics
For income investors, here are the key dates for the final dividend of 21.79p:
- Ex-dividend date: 23 April 2026
- Record date: 24 April 2026
- DRIP election deadline: 13 May 2026
- Payment date: 4 June 2026
The company will host a presentation at 9:30am UK time on 11 March 2026 at One Coleman Street, London, with a live webcast. Materials and a replay will be available via the investor relations site. Useful links:
My take: execution now needs to match the ambition
L&G is presenting as a sharper, more focused business: simplifying the group, leaning into structural demand for retirement income, and knitting the ecosystem together from Workplace DC to Retail Annuities to Asset Management. The numbers – higher per-share metrics, a 210% coverage ratio, and record buyback – support that story.
The next leg is about pace and discipline. Asset Management is described as being at an inflection, with ANNR growth and margin expansion already visible. If that continues, it should add higher-quality, fee-based earnings alongside the strong capital generation from PRT and annuities.
Bottom line: a shareholder-friendly update with credible growth pillars. The buyback signals confidence, the dividend keeps edging up, and the balance sheet can support both. I’ll be watching for continued improvement in fee margins, steady PRT execution, and the onboarding of the £3.7bn Workplace assets in 2026 to keep the flywheel spinning.
