2005 Bonus Declaration

Legal & General Group PLC
23 February 2006


Stock Exchange Announcement
23 February 2006


LEGAL & GENERAL GROUP PLC BONUS ANNOUNCEMENT 2005



•    Excellent 19% investment return(1) achieved in 2005
 

•    Vast majority of terminal bonus rates increased - reflecting
     strong performance

•    Interim(2) bonus rates generally held or increased, reflecting
     stable long term investment outlook


•    Single premium bond held for ten years shows a 12.8% increase in value over 
     the year


•    Total cost of bonuses allocated to policyholders for 2005 was £418m





Legal & General's with-profits fund achieved a return in excess of 19% in 2005
after investment charges but gross of tax (16% net of tax). This is the third
year in succession in which the company's with-profits fund has achieved double
digit investment returns.



Legal & General Actuary, UK, Ian Gibson said, 'I am delighted that we have been
able to achieve such an excellent investment return for our with-profits
policyholders.



'As a result of this strong investment performance we have been able to increase
the terminal bonuses awarded to the vast majority of our maturing policies.



'This year's interim bonus rate declarations are very similar to those of last
year, reflecting stable investment expectations.'


Year                     2001     2002     2003       2004     2005     5 year average
                                                                        annual return
With-profits             -7%      -9%      14%        12%      19%            5%
UK equities(3)          -13%     -23%      21%        13%      22%            2%
Deposit Account(4)        4%       3%       2%         3%       3%            3%



Also announced today are improvements to those few policies which still retain
market value reduction factors. The remaining reduction factors have been cut
today for the second time this year. No investment bonds now have a reduction
factor of more than 10%.





(1) This return refers to that achieved on the assets within the fund which back
policyholders' asset shares. These represent the majority of assets within the
fund.

(2) Each year a normal annual bonus is declared for the previous year. An interim
bonus rate, which is not guaranteed and can be changed without notice, is also
declared and applies in respect of the current year for any claims.

(3) FTSE All Share total return

(4) Source: Micropal






2005 Bonus Declaration



The impact on customers will vary according to product type and is illustrated
by examples shown below:



Conventional Endowment Annual Bonus Rates declared today


           2004                                                          2005
           0.75            % of sum assured                              0.75
           1.25            % of existing bonus                           1.25



Conventional Endowment Terminal Bonus Rates



Examples of terminal bonus as a percentage of existing bonus:


        Entry year                 Before declaration              After declaration
           1981                            39%                            43%
           1986                            59%                            80%
           1991                            33%                            64%





Examples of the impact of Bonuses on Legal & General customers



The following examples aim to:



1. Show the value of a policy maturing on 1 March 2006 (and for the low cost
mortgage endowment - the maturity value against target).



2. Highlight the outcome for a policy taken out on the same day as in the first
example but maturing (not surrendering) one year earlier. The difference in this
value from the value in the first example includes an extra year of premium
payments, but makes evident the benefit of the past year's investment
performance.



3. Show the value of a policy both starting and maturing one year earlier than
in the first example.



4. Show the 'real' rate of return which represents the yield obtained in excess
of the return earned if the premiums had grown in line with the RPI (increase in
RPI for the period January 2006 to March 2006 remains at the same level as
January 2006).



25 year savings endowment, male aged 29 at entry, £50pm

1/3/81 to 1/3/06  Maturity value £46,587
                  (8.1% annualised return vs. inflation of 3.3%, real return of 4.7%)

1/3/81 to 1/3/05   Maturity value £43,282
                   (8.2% annualised return vs inflation of 3.4%, real return of 4.7%)

1/3/80 to 1/3/05   Maturity value £48,757
                   (8.4% annualised return vs. inflation of 3.5%, real return of 4.8%)



25 year low cost mortgage endowment, male aged 29 at entry, £50pm

1/3/81 to 1/3/06   Maturity value £45,769 against target of £27,656 (£18,113 surplus)
                   (8.0% annualised return vs. inflation of 3.3%, real return of 4.6%)

1/3/81 to 1/3/05    Maturity value £42,743 against target of £25,783 (£16,960 surplus)
                   (8.2% annualised return vs. inflation of 3.4%, real return of 4.6%)

1/3/80 to 1/3/05    Maturity value £47,903 against target of £27,656 (£20,247 surplus)
                   (8.3% annualised return vs. inflation of 3.5%, real return of 4.7%)



15 year savings endowment, male aged 29 at entry, £50pm

1/3/91 to 1/3/06      Maturity value £14,093

                   (5.7% annualised return vs. inflation of 2.5%, real return of 3.2%)

1/3/91 to 1/3/05      Maturity value £11,918

                   (4.8% annualised return vs. inflation of 2.6%, real return of 2.2%)

1/3/90 to 1/3/05      Maturity value £13,395

                   (5.1% annualised return vs. inflation of 2.6%, real return of 2.4%)



20 year pension, male aged 45 at entry, £200pm

1/3/86 to 1/3/06      Open market option of £115,334

                   (8.1% annualised return vs. inflation of 2.9%, real return of 5.0%)

1/3/86 to 1/3/05      Open market option of £105,735

                   (8.2% annualised return vs. inflation of 3.0%, real return of 5.0%)

1/3/85 to 1/3/05      Open market option of £121,316

                   (8.5% annualised return vs. inflation of 3.1%, real return of 5.3%)



With-profit bond, £10,000 single premium

1/3/96 to 1/3/06      Surrender value £17,961
                   (6.0% annualised return vs. inflation of 2.5%, real return of 3.4%)

1/3/96 to 1/3/05      Surrender value £15,926
                   (5.3% annualised return vs. inflation of 2.6%, real return of 2.7%)

1/3/95 to 1/3/05      Surrender value £18,416
                   (6.3% annualised return vs. inflation of 2.6%, real return of 3.6%)





Notes to Editors



The information contained in this press release is intended solely for
jounalists and should not be relied upon by private investors and any other
persons to make financial decisions.



Additional bonus rates and running yields

Given the large number of Legal & General bonus rates, further examples are
available on request.



Number of customers: Bonuses declared affect around 900,000 policyholders



Financial strength

Legal & General Assurance Society is one of the UK's top rated companies for
financial strength.  Three of the world's leading independent rating companies,
Standard and Poor's, Moody's and AM Best have recognised this.



The current ratings are:


Standard and Poor's               AA+                'Very Strong'
Moody's                           Aa1                'Superior'
AM Best                           A+                 'Superior'





Asset mix

The overall mix of assets applicable to with-profits policies eligible for
bonuses was:


                                          End 2005         End 2004         End 2003
UK shares                                   38%              43%              41%
Overseas shares                             11%               9%              10%
Fixed interest securities                   33%              29%              31%
Commercial property                         18%              19%              18%





Bonus policy

In determining the amounts payable under with-profits policies the methods used
have the following aims.

•         To treat all with-profits investors equitably.

•         To take account of the returns earned on the underlying investments.

•         To take account of the requirement to honour guarantees and options
already granted to investors.

•         To smooth returns to investors so that some of the short-term
fluctuations in the value of the investments of the with-profits sub-fund are
not immediately reflected in payments.

•         To incorporate some pooling and sharing of experience between
policyholders.



In order to treat different types and generations of with-profits investments
equitably the methods also aim to have regard to differences in product design,
such as differences in:

•         The nature and extent of guarantees and options provided.

•         The types and value of risk benefits provided between different types
of product and different policies of the same type.

•         Taxation between products.



Compliance with Principles and Practices of Financial Management

The bonus declaration has been subject to independent review by the Tillinghast
business of Towers Perrin.  In Tilinghast's judgement, today's bonus declaration
and the process by which it was reached comply with       Legal & General's
Principles and Practices of Financial Management. In undertaking this review,
Tillinghast has relied on the accuracy and completeness of the information
supplied to it by Legal & General.



Regulatory notes

•         Past performance is not a guide to future performance.

•         Legal & General Assurance Society Limited is authorised and regulated
by the Financial Services Authority.

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

•         The surpluses over targets shown in the mortgage endowment examples
above arose during a period when investment returns were high; similar returns
and therefore such large surpluses may not be available in future years

•         Forward-looking statements:

This document may contain certain forward-looking statements with respect to
certain of Legal & General's plans and its current goals and expectations
relating to future financial condition, performance and results.  By their
nature forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances which are beyond Legal & General's
control, including, among others, UK domestic and global economic and business
conditions, market related risks such as fluctuations in interest rates and
exchange rates, the policies and actions of regulatory authorities, the impact
of competition and the policies and actions of governmental and regulatory
authorities, the timing impact and other uncertainties of future acquisition or
combinations within relevant industries.  As a result, Legal & General's actual
future condition, performance and results may differ materially from the plans,
goals and expectations set out in Legal & General's forward-looking statements.
Legal & General does not undertake to update forward-looking statements
contained in this document or any other forward-looking statement it may make.



ENDS



Investor Relations:
Peter Horsman         Head of Investor Relations         020 7528 6362


Issued By:
John Morgan           Media Relations Director           020 7528 6213





                      This information is provided by RNS
            The company news service from the London Stock Exchange