2000 Bonus Rates

Legal & General Group PLC
27 February 2001



                 LEGAL & GENERAL ANNOUNCES 2000 BONUS RATES

Today's 2000 bonus declaration shows real rates of return on Legal & General's
25 year with-profits endowment policies at 7.2%* so providing further evidence
of the success of investing in with-profits policies.

During 2000 there were falls in the UK and most major overseas stock markets.
However, the long term fund benefited from a well-diversified investment
portfolio with good performance from property investment and positive returns
from fixed interest securities. As a result, the total return earned was just
positive, though much lower than has been achieved in recent years.

The return for the year 2000 attributed to currently maturing policies was
higher than the return actually earned. This demonstrates the benefits of
smoothing to those who might otherwise be concerned by falls in stock market
values.

Looking forward, medium and long-term interest rates are lower than they have
been for most of the previous 40 years and dividend yields on equities remain
at a very low level. Inflation, when judged by the previous decade, is very
low and is not expected to rise in the near future.

Legal & General's approach to this year's bonus declaration reflects both the
investment conditions of 2000 and the expectation of lower inflation and
investment returns. As a result, payouts on maturing policies and most
reversionary bonus rates have been reduced.

*The real rate of return (ie the actual return minus inflation) is based on a
25 year with-profits endowment for a male aged 29 paying £50 per month
maturing 1 March 2001. The figure assumes that annual inflation (RPI) for
December to March 2001 remains at the same level as December 2000. 


Notes to Editors

1. Maturity values and yields for Legal & General 25 year with-profits
endowment policies taken out by a 29 year old male investing £50 per month and
maturing on 1 March 2001 are:

Endowment Assurance Policy: £86,895 (2000: £96,448). This is an actual return
of 12.1% and a real return over inflation of 7.2% (2000: 7.5%). This return is
6.7% higher than the 5.4% the same investment would have obtained from an
average higher rate building society account. 

(The returns from the average higher rate building society deposit account are
the net rates to 1 March 2001 assuming that interest rates for January to 1
March 2001 remain at the January 2001 level (Source Micropal). A building
society guarantees the capital and added interest of its investments.)

Low Cost Endowment Policy:  £84,869 (2000: £94,205). This is £59,219 greater
than the mortgage of £25,650 it was designed to repay. The policy carries a
higher level of life assurance cover than the endowment assurance policies. 

2. Further details

Examples of payouts to customers with policies maturing in 2001 are attached
below.

3. Policy

The 2000 bonus declaration is in line with Legal & General's principles which
aim to provide competitive and equitable returns for policyholders while
maintaining the strength of the long term fund for future generations of
policyholders. This requires Legal & General to: 
 
-  Treat all generations of policyholders and types of policies fairly.
-  Take account of the amount of assets generated by each type and   
generation of policy allowing for investment returns achieved and expenses
incurred.
-  Smooth maturity returns to policyholders so that they are shielded from
some of the fluctuations that can be experienced in investment returns and
other factors.

4. Total Cost of Bonuses in 2000:  £848m  (1999: £820m).

5. Investment Mix:

The investment mix backing participating with-profits business in aggregate
showed little change during 2000.


                             End 1999      End 2000
                                 %             %
Fixed Interest                  19             20
Property                        14             14
Equity Shares                     
   UK Shares                    50             48
   Non UK Shares                16             16
   Unlisted Shares               1              1
Other Investments                0              1
                               ___            ___
                               100            100



The asset mix is the mix for all the participating with-profits business. The
asset mix and therefore the investment return attributed to different types
and generations of policyholders may be different from the above as it
reflects the different product designs, guarantees and representations made to
policyholders. The asset mix may change in the future.

The investment return earned on participating with-profits business in 2000
was 1%.

6. Regulatory Notes:

-  Past performance is not necessarily a guide to future performance.

-  Legal & General Assurance Society Limited is regulated by the Personal
Investment Authority.

- Returns from with-profits contracts are dependent on bonuses. Future bonus
rates are not guaranteed.

-  Unlike a with-profits policy, capital and income in a deposit account is
guaranteed on encashment.

- The surplus arose during a period when investment returns were high, similar
returns and  therefore such large surpluses may not be available in future
years.

Issued By:
John Morgan
Head of Public Relations
Tel: [phone]



Appendix A


              2000 ANNUAL (REVERSIONARY) BONUSES ON LIFE POLICIES

                    2000                            1999 
      
                    2.00     % of sum assured       2.25
                    3.50     % of existing bonus    4.25


                     Payouts on Maturing Endowment Policies
                                 £50 per month

                 Maturing     Yield  %       Maturing      Yield  %   
    
                 1/3/01      (Real Return*)  1/3/00        (Real Return*)

                    £                                       £
25 Year Payout   86,895        12.1          96,448        12.8              
                               (7.2)                       (7.5)
              
20 Year Payout   39,233        10.7          43,545        11.5               
                               (6.7)                       (7.4)

15 Year Payout   19,127         9.4          20,708        10.4
                               (5.9)                       (6.8)

10 Year Payout    9,330         8.5           9,476         8.8
                               (5.7)                       (6.2)



Notes:
The example assumes a male aged 30 next birthday paying a premium of £50 per
month.

*The 'real rate of return' represents the yield obtained less the return
earned if the premiums had grown in line with the RPI (increase in RPI for the
period December  to March 2001 remains at the same level as December 2000).




Appendix B

               2000 UNITISED WITH-PROFITS BONUS DECLARATION

The figures in the table are the running yields for premiums paid in 2000 and
the interim running yields for premiums paid in 2000 and 2001. The equivalent
interim running yields declared last year on premiums paid in 2000 are shown
in brackets.


                         Single Premium Life Policies (current series)
With-profits Income Bond
   2000 Running Yield                7.00%*   (7.00)%*
   2001 Interim Running Yield        6.50%

With-profits Bond
   2000 Running Yield                5.50%**  (5.50)%**
   2001 Interim Running Yield        5.00%


     Regular Premium (Annual) Life Policies (Latest Contract Versions)
Flexible Mortgage Plan (Higher rates apply to some earlier versions of the
Plan)
   2000 Running Yield                6.00%   (6.00)%
   2001 Interim Running Yield        5.50%

Savings Plan (Higher rates apply to some earlier versions of the Plan)
   2000 Running Yield                5.35%   (5.35)%
   2001 Interim Running Yield        4.85%


                 Regular Premium (Annual) Pensions Policies
Personal Pension Plan (accumulation units)
   2000 Running Yield                6.50%  (6.50)%
   2001 Interim Running Yield        6.00%



Notes:
* For Income Bonds sold from 1 January to 30 June 2000. The rate for income
bonds sold from 1 July to 31 December 2000 was 6.50%.

** For with-profits bonds sold from 1 January to 30 June 2000. The rate for
income bonds sold from 1 July to 31 December 2000 was 5%.

For most of Legal & General's Unitised With-profits policies growth attributed
comes from the addition of a 'contractual addition' and the addition of
bonuses. Both depend upon when the premiums were paid and can vary from year
to year. Where Unitised With-profits policies do not attract a contractual
addition the annual bonuses have been correspondingly higher.

Each year a normal, annual bonus, is declared for the previous year and the
sum of the normal annual bonus and any contractual addition is called the
'Running Yield'. An interim bonus rate, which is not guaranteed and which can
be changed without notice is also declared and applies in respect of the
current year for any claims. 'Interim Running Yield' is the sum of interim
bonus and any contractual addition. NB: the annual bonus rates declared for
2001 may be different from the interim rates. 

Terminal bonus may also be paid in the event of claim. Terminal bonus rates
are not guaranteed and can be changed without notice.

The Unitised With-profits terminal bonus rates which range from 0.50% to 6.50%
per annum also depend on the policy type and when the premiums were paid.

Legal & General reserves the right in certain investment conditions to reduce
the amount payable on surrender or switch by the application of a Market Value
Adjustment Factor.

Further example of bonus rates applicable to premiums paid in other years can
be obtained from Legal & General.