Robust financial position, new business up 5%

Highlights for the 9 months to 30 September 2008:(1)

* Worldwide new business £1,137m (9M 07 £1,085m) up 5%
* UK new business £1,047m (9M 07 £993m) up 5%
* UK Risk: new business £381m (9M 07 £295m) up 29%
* Pension buyout sales more than trebled up 226%
* Group protection sales continue to grow up 13%
* UK Savings: new business £666m (9M 07 £698m) down 5%
* Unit trust and ISA(2) sales remain strong up 35%
* Non profit ( http://www.legalandgeneral.com/pensions/ )pensions boosted by SIPP success up 27%
* Unit linked bonds remain at lower levels as anticipated down 49%
* Investment management gross new funds £28.3bn (9M 07 £33.4bn)
* IGD surplus £2.9bn at end of September(3)

Strong progress in our core retail investment business (unit trusts and ISAs) continued, with sales up 35% to £168m, including a strong contribution from our distribution relationship with Nationwide Building Society. While we continue to build our range of products in this market, our traditional strengths in passive, fixed income and balanced funds continue to resonate in current conditions.

With-profits

With-profits savings volumes of £151m were 17% lower compared to the same period of 2007 (9M 07 £183m). With-profits bond sales continue to increase strongly, up 186% year on year, reflecting investor appetite for more defensive investment options.

Outlook

Underlying conditions in retail savings markets are likely to remain challenging over the next 12 months, however we continue to anticipate progress in corporate pension, SIPP and core retail investment business.

Outlook

LGIM has delivered average gross sales of £24bn per annum over the last 5 calendar years, excluding institutional unit trust sales. We continue to see opportunities for growth from our traditional product areas, but also through expanding further in structured solutions, active fixed income and active equities, where investment performance continues to progress.

International business

Sales in our US business were up 6% in local currency terms to $71m, with ongoing growth in our high net worth term life business. In the Netherlands we continued to grow in very challenging industry conditions, with sales up 3% to €30m. We increased share in the unit linked market and delivered strong growth in term life products. Our French business saw sales reduce by 25% to €41m, once again reflecting the absence this year of fiscally-stimulated sales which led to a big one-off increase in sales in 2007.

Financial strength

At 30 September 2008, Legal & General\\\\\\\\\\\\\\\’s estimated surplus capital on the IGD basis remained strong at £2.9bn. This compares to £3.4bn estimated at 30 June 2008. The change primarily reflects the decline in investment markets and the impact of our ongoing share buyback in the period. We have repurchased shares to a value of £111m in the third quarter.

We estimate that in the event of a 30% fall in equity markets from the end of September position, our estimated IGD surplus would reduce to approximately £2bn.

(1) All sales figures are quoted in APE terms unless otherwise stated (APE = Annual Premium Equivalent = new regular premium plus 10% of new single premium)

(2) Core retail investment sales

(3) Management estimate of Insurance Groups Directive surplus – a regulatory measure of group capitalisation. 30 June 2008 position was estimated to be £3.4bn

(4) Bank of England data for the 8 month period to the end of August 2008, compared to the same period of 2007

(5) Association of British Insurers data
Notes to Editors:

Issued share capital at 30 September 2008 was 5,867,110,348 shares of 2.5p.

Keywords:: pensions, legal and general, financial profits, legal and general profits

Name:: John Godfrey

Email:: mailtogreenlight@gmail.com

Contact Information::

The Publicity Team
Legal & General House
Kingswood
Tadworth
Surrey KT20 6EU
020 3124 2090
john.godfrey@group.landg.com
website: http://www.legalandgeneral.com/pensions/

Website: http://www.legalandgeneral.com/pensions/