Annuity Reserving Clarified

Legal & General Group PLC
24 January 2003


                                                                 24 January 2003


                           LEGAL & GENERAL GROUP PLC

                       CLARIFICATION OF ANNUITY RESERVING


There has been considerable comment, both by the media and by analysts, arising
from the recent publication of a working paper by the Continuous Mortality
Investigation Bureau (CMIB). The contents of the working paper, including
revised predictions of improvements in male annuitant mortality, have given rise
to an extremely wide range of estimates of their impact on participants in the
UK annuity market, including Legal & General. As a consequence, Legal & General
wishes to give investors guidance on the issue.

In setting our assumptions at the end of 2002 for statutory valuation reserving
and calculating embedded values, we have taken into account the findings of the
CMIB as well as changes arising from our normal internal review of recent
experience. Our preliminary estimates indicate that the effect of changes to our
mortality and other demographic assumptions for annuitants will be to reduce our
post-tax Operating Profit on an Achieved Profits (AP) basis by around £100
million. The grossed-up impact on our pre-tax AP Operating Profit will be around
£140 million.

We estimate that the effect on the Modified Statutory Solvency (MSS) basis will
be to reduce the post-tax result on ordinary activities by around £100 million.
It is our normal practice to review reserving bases for other product lines at
the year end. Our preliminary estimates indicate that the overall impact of
these changes will be positive for the result on the MSS basis and that they
will, to an extent, offset the reduction in the MSS result. As usual,
appropriate details of all these changes will form part of our Preliminary
Results, to be announced on Thursday 27 February, 2003.

For further information contact:

Investors:

Peter Horsman
Head of Investor Relations
020 7528 6362

Media:

John Morgan
Head of PR
020 7528 6213

Anthony Carlisle
Citigate Dewe Rogerson
020 7638 9571
07973 611 888


Notes to Editors:

 1. The embedded value of Legal & General's long term businesses was £5,144
    million on 30 June 2002
 2. A copy of this announcement can be found in the shareholder section of our
    website at http://investor.legalandgeneral.com/releases.cfm
 3. There will be a conference call today for analysts and fund managers at
    9.00am (UK time) on [phone] hosted by Andrew Palmer, Group
    Director (Finance). Replay will be available until 31 January 2003 on +44
    (0)20 8797 2499 and the pin code is 863 195#.


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