London, January 26, 2026, 09:27 GMT — Regular session
- Legal & General shares gained roughly 0.7% during early trading in London.
- Yields on UK 10-year gilts dropped, putting life insurers under the spotlight.
- Investors are bracing for a softer UK pension buyout environment as L&G’s full-year results approach in March.
Legal & General Group Plc shares edged higher in early Monday trading, rising 1.8 pence, or roughly 0.7%, to about 260 pence by 09:27 GMT. The stock kicked off at 260.8 pence, following a previous close of 258.2 pence. So far, the day’s trading range has been 260.0 to 261.2 pence. 1
This move is significant since L&G operates at the crossroads of two volatile markets this month: UK government bonds and pension risk transfer. Both directly influence investor views on its earnings quality, capital strength, and dividend sustainability.
UK 10-year gilt yields dropped 3.6 basis points, or 0.036 percentage point, settling at 4.485% during London morning trade. Since yields and prices move inversely, this decline points to increased demand for UK government bonds. 2
For life insurers, gilts aren’t just background noise. L&G’s big bond holdings and its role in pricing long-dated retirement promises mean yield changes quickly shift the math — affecting returns on assets, the reserves needed for liabilities, and the appeal of new business.
Signs are emerging that the UK pension “buyout” market cooled last year. Early estimates suggest 2025 deal values will hit about £40 billion, down from £48 billion in 2024. Some big sponsors appear inclined to keep their defined-benefit schemes running longer, while government proposals aim to ease access to pension surpluses. “Buyouts,” or pension risk transfers, involve companies handing over pension payment responsibilities to insurers. Ian Aley, who leads WTW’s pension risk transfer team, expects 2026 volumes could “probably revert” to earlier levels, around £50 billion. 3
Against this backdrop, L&G is moving more like a rate-sensitive stock than just a typical domestic financial. Its dividend yield—hovering near 8% based on Monday’s price—keeps it in focus, but it also means investors expect stronger signals on cash flow and solvency when results come out.
The wider London market dipped at the start of trading. The FTSE 100 fell roughly 0.1% early on, weighed down by a stronger sterling even though some commodity stocks were firm. 4
L&G faces the risk that a further slowdown in pension buyout activity or tougher pricing amid rising competition could squeeze returns, especially as bond markets shift once more. A sharper fall in yields might also reshape demand and the economics of new annuity business, despite providing some short-term relief to bond portfolios.
Investors are set to zero in on L&G’s preliminary full-year results on March 11. The group will provide updates on capital position, cash flow, and its pipeline for pension risk transfer deals. 5
