UPDATE: New reports reveal that a £10,000 investment in Legal & General (LSE: LGEN) shares could generate a passive income of approximately £859 in 2026. This potential income is driven by the company’s consistent dividend payouts, which have made it a popular choice for UK investors.
According to financial forecasts, Legal & General is expected to increase its dividend by 2% annually. For the 2025 financial year, the company paid out dividends totaling 21.48p per share, with a final dividend of 15.36p on June 5 and an interim dividend of 6.12p on September 26. With this forecast, the projected dividend for 2026 is set at 21.9p per share.
To illustrate the potential returns, if an investor buys shares at a price of £2.55, they would acquire approximately 3,921 shares. Multiplying this by the estimated dividend yield of 21.9p results in a total passive income of £859 for the year.
However, investors should approach this opportunity with caution. Dividends are never guaranteed, and there are significant risks involved. Currently, Legal & General’s dividends exceed its earnings, leading to a low dividend coverage ratio. Market volatility could also impact share prices, with risks persisting both in the short and long term.
As the market reacts to financial conditions, the performance of Legal & General shares could be influenced by broader economic factors, including potential declines in operating profit from its various divisions.
The question remains: Are the potential rewards worth the risks? While Legal & General shares could be a valuable component of a diversified income portfolio, investors should consider alternatives with a stronger long-term track record and higher dividend coverage.
In light of these developments, investors are urged to assess their options carefully as markets evolve. For those considering a passive income strategy, it may be wise to explore other shares that promise better returns in the coming years.
Stay tuned for further updates on Legal & General and other investment opportunities that could impact your financial future.
