L&G dividend: cash coverage and outlook
L&G's forecast dividend per share is 0.23 GBP in 2027 and 2028, rising to 0.24 GBP in 2029. The memo tests coverage through capital generation: H1 net surplus generation was 713 million against dividends paid of 886 million, while new business and buybacks compete for the same resources.
How much does L&G pay per share?
Base-case dividends per share rise from 0.23 GBP in 2027 to 0.23 GBP in 2028. They reach 0.24 GBP in 2029. The bear case uses 0.22 GBP, then 0.21 GBP and 0.21 GBP. The bull case uses 0.23 GBP, then 0.24 GBP and 0.25 GBP.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| EPS, diluted | 8.16 | 1.77 | |||
| − Dividends, per share | 20.52 | 20.68 | 18.66 | 17.77 | 16.89 |
| − Share buybacks, per share | 8.28 | 3.38 | 0.00 | 0.00 | 0.00 |
| = Paid out more, per share | 20.98 | 22.29 | |||
| Book value per share | 31.38 | 51.81 | 72.43 | 84.83 | 83.08 |
| Diluted shares (average of the year), change | 2.2% | -5.3% | 0.0% | -0.3% | 0.3% |
Does L&G's dividend come from cash?
The base path follows management’s 2% annual dividend-growth guidance through 2027 and extends it modestly. It also assumes surplus generation covers the dividend by 2027. The bear case reflects H1 net surplus generation of 713 million against dividends paid of 886 million, while the bull case assumes stronger fee earnings and surplus generation.
The US disposal released a large amount of capital. L&G directed £1bn of the proceeds to an additional shareholder return and later announced a £1.2bn buyback. A buyback reduces the number of shares claiming future earnings, but it benefits continuing shareholders only if L&G pays a sensible price and retains enough capital for its obligations.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Net income | 496 | 126 | |||
| = Earnings for common shareholders | 475 | 105 | |||
| − Dividends paid on ordinary shares | 1,247 | 1,230 | 1,172 | 1,116 | 1,063 |
| − Share buybacks | 503 | 201 | 0 | 0 | 0 |
| = Paid out more than it earned | 1,275 | 1,326 | |||
| Paid out, % of earnings for common | 368.4% | 1362.9% |
What could change L&G's dividend?
The bear case would become more likely through 2027–28 if new pension premiums and CSM weaken further, or if tight spreads force L&G to reject business. Through 2027–29, continuing asset-management outflows or surplus generation below dividends would reduce buybacks, dividend growth and the multiple.
What is L&G's dividend yield today?
The dividend yield is not guaranteed income. It can rise because the share price falls, not because the dividend becomes safer. L&G says core earnings should cover the dividend in 2026 and that cover should improve in 2027. It also plans more than £5 billion of shareholder returns across 2025–2027. Solvency II operational surplus generation was £790 million in the first half of 2026. That supports the plan, but new business and capital requirements compete for the same resources.
| Today (Oct 17, 2026) | |
|---|---|
| Share price | 298.8 |
| Market value (calculated) | 16,181.01 |
| Dividend yield (calculated) | 7.3% |
What this means. The price-to-earnings figure based on core earnings is lower because it uses the insurer’s own measure of ongoing profit rather than its standard reported profit.