URGENT UPDATE: A UK investor is targeting an impressive £26,515 a year in retirement income from a £20,000 investment in the passive income powerhouse, Legal & General (LSE: LGEN). Just confirmed, the company has consistently delivered high returns, making it a prime choice for those seeking to bolster their finances ahead of retirement.
The investor, who acquired shares several years ago, emphasizes the importance of not relying solely on the State Pension for a comfortable retirement. Legal & General has proven to be a reliable source of passive income, generating substantial earnings with minimal effort.
In its 12 March 2024 results, Legal & General reported a 6% increase in operating profit, reaching £1.616 billion. Operating earnings per share (EPS) also rose to 20.23p. In its subsequent 6 August 2025 H1 results, profits continued this upward trajectory, climbing to £859 million with operating EPS jumping to 10.94p. Analysts predict a staggering 27.2% annual earnings growth through 2027.
A critical factor in this growth is the strategic partnership with Japanese insurance giant Meiji Yasuda, which recently invested $2.3 billion (£1.8 billion) for a 5% stake in Legal & General. This alliance is set to enhance the UK firm’s US Pension Risk Transfer business, a sector poised for significant expansion, as an estimated $3 trillion in defined benefit pension schemes remain to be transferred.
Legal & General’s return for shareholders has been robust. The company paid a dividend of 21.36p in 2024, yielding 9% based on its current share price of £2.44. This yield is nearly three times the current FTSE 100 average of 3.1%. Analysts predict dividends will continue to grow, forecasting 21.8p this year, 22.2p next year, and 22.6p by 2027—potentially pushing the yield to 9.5%.
For investors eyeing retirement, a further £20,000 investment in Legal & General could yield an astonishing £29,027 in dividends after just 10 years, based on current yields without factoring in projected increases. After 20 years, that figure could soar to £100,183, and to £274,612 after 30 years. By that time, the total value of the holding, including the initial investment, could reach £294,612 with an annual dividend income of £26,515.
As this investor prepares to increase their stake in Legal & General, they are also exploring other high-yielding FTSE firms. The urgency to act is palpable as the market dynamics shift, and those seeking financial security in retirement are advised to consider the implications of these developments.
For those looking to enhance their investment strategy, experts suggest monitoring Legal & General closely as it continues to emerge as a top contender for generating sustainable passive income. Investors are encouraged to stay informed and act swiftly to capitalize on these promising opportunities.
