Policyholder Communication

Legal & General Group PLC
08 November 2007



                  Legal & General - Policyholder Communication



As part of its ongoing capital review, Legal & General has initiated a mailing
programme to its 880,000 with-profits policyholders to explain proposals for the
restructuring of shareholder assets within the long term fund of Legal & General
Assurance Society Limited ('Society').



In summary, it is proposed:



•         To merge the 1996 Sub-Fund, which wholly comprises shareholder assets
(£316m at 30 June 2007), with shareholder retained capital ('SRC') within the
long term fund.

•         To establish alternative capital support for the with-profits fund.
This will initially comprise £500m of shareholders' assets within Society and
will gradually reduce to zero over a period not exceeding ten years.

•         To remove the formula which currently determines distributions to
shareholders from the non profit part of the long term fund, including SRC.
This would provide greater flexibility on the timing and amount of these
distributions.



To ensure our policyholders' interests are properly protected, we have discussed
these proposed changes with the FSA and have also obtained an independent
review.



The expected date for implementation is 31 December 2007.





Notes to Editors



Policyholder documentation can be found on our website at
www.legalandgeneral.com/with-profits.



Legal & General's with-profits business


Legal & General's with-profits fund is one of the strongest in the UK market and
has delivered excellent performance for customers over recent years. We invest
some £18 billion (as at 30 June 2007) for our with-profits customers. A further
£1 billion of assets (as at 30 June 2007), known as the with-profits estate,
provide additional security for with-profits customers.  The fund is managed
with the objective of ensuring that it does not need additional capital from
outside the with-profits fund. The with-profits estate covered the published
regulatory capital requirement five times at 30 June 2007.



Why are these changes being made?



Following recent regulatory changes, it is no longer necessary to maintain the
current capital structure of Society in order to protect our customers'
interests. We believe that the proposed changes ensure that our customers'
interests are protected whilst putting in place a more efficient capital
structure.



What is the '1996 Sub-Fund'?



The 1996 Sub-Fund is a part of the capital structure of Society which comprises
shareholder assets.  Society's Directors have the ability in certain
circumstances to use some of the investment return on these assets to support
with-profits bonuses.  Although Society's Directors had the ability to use 1996
Sub-Fund assets in this way, this has not been necessary in the past and we do
not expect that it would have been needed in future.



Is this an estate attribution exercise?



No.  The proposed changes relate to the restructuring of shareholder assets
only.



Do these proposals affect the with-profits estate?



The protection provided for our with-profits customers by the with-profits
estate would not be changed as a result of these proposals.



What is the impact on your capital position?



The merger of the 1996 sub-fund with other shareholder assets and the
institution of the new capital support for the with-profits business are
expected to have no impact on Society's regulatory surplus capital or the
Group's IGD surplus capital.



How is the 'formula' currently calculated?



The formula is based on the value of the UK non profit life and pensions
business.  It is described in detail on pages 66 and 67 of our 2006 Annual
Report & Accounts.  In 2006, the transfer to shareholders' funds made under this
basis was £272m net of tax.



Capital review - progress to date



November 2006:

•         Set out the framework for the capital review.

•         Introduced balanced scorecard measures for capital management to
enable analysts and investors to monitor Legal & General's financial strength.



December 2006:

•         Ceded the non-linked non profit pensions and annuity business of
Society to a new, wholly owned, reinsurance subsidiary, LGPL.

•         Implemented the FSA's Policy Statement 06/14 across its UK individual
protection business.

•         Reviewed the asset liability matching policy for annuity business
during 2006 and made a number of investment changes to achieve a closer asset
liability match.



March 2007:

•         Updated the market on our balanced scorecard.



May 2007:

•         Issued £600m Innovative tier 1 perpetual capital securities.



July 2007:

•         Updated the market on our balanced scorecard.

•         Announced and began a £1billion on-market share buyback.



November 2007:

•         Converted Legal & General Pensions Limited to an Insurance Special
Purpose Vehicle.













About Legal & General



Legal & General Group Plc is a leading UK risk, wealth and investment company.
Founded over 170 years ago, Legal & General today provides life assurance and
other financial protection products, annuities and long-term savings products
including ISA's and pensions. With over £250 billion in funds under management,
it is also the largest investor for UK pension funds. Legal & General has over
5.5 million UK customers.  Our products are sold through over 30 bank and
building society relationships, through Independent Financial Advisers and also
directly to customers.  Legal & General Assurance Society Limited, our principal
operating company, is one of Europe's top rated life companies for financial
strength, with an AA+ rating from Standard & Poor's and Aa1 from Moody's.





Enquiries to:

Investors:
Jonathan Maddock, Head of Investor Relations              020 3124 2150
Nicola Marshall, Investor Relations Manager               020 3124 2151



Media:
John Godfrey, Group Communications Director               020 3124 2090
Anthony Carlisle, Citigate Dewe Rogerson                  07973 611888




Financial Calendar:


Q4 2007 New business results                              24 January 2008
2007 Preliminary results                                  18 March 2008
Q1 2008 New business results                              24 April 2008
2008 AGM                                                  14 May 2008
2008 Interim and new business results                     5 August 2008
Q3 2008 New business results                              23 October 2008
Q4 2008 New business results                              29 January 2009

Forward-looking statements:

This document may contain certain forward-looking statements with respect to
certain of Legal & General Group Plc'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
Group Plc'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 governmental and
regulatory authorities, the impact of competition, the timing impact and other
uncertainties of future mergers or combinations within relevant industries. As a
result, Legal & General Group Plc's actual future condition, performance and
results may differ materially from the plans, goals and expectations set out in
Legal & General Group Plc's forward-looking statements.  Legal & General Group
Plc does not undertake to update forward-looking statements contained in this
document or any other forward-looking statement it may make.


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