Legal & General (LGEN) remains a popular pick for passive income investors in 2026, offering a forecasted 7.4% dividend yield, a long history of payouts, and a programme of buybacks — but it carries cyclical risks and potential share-price volatility.
Legal & General offers a forecast dividend yield of 7.4% and has maintained or increased its annual dividend every year this century.
The company targets about 2% dividend growth per year and is running a £1.2bn buyback plan, with roughly £450m completed by first-half results.
Investors seeking income should compare Legal & General with other income names mentioned: Greencoat UK Wind, Lloyds, Barclays (5.1% forecast), Imperial Brands (6.7%), and higher-yielding but less predictable peers such as Ithaca Energy.
Why Legal & General is on income lists
Legal & General (LGEN) remains widely bought by UK passive income investors in 2026. The stock made top-10 lists for major ISA providers in September, and analysts forecast a 7.4% dividend yield. That yield, combined with a long track record of payouts, is why many retail investors keep it in their income portfolios.
Legal & General has an active share buyback programme aimed at enhancing per-share metrics over time. By the first-half results in August, the group had completed about £450m of a planned £1.2bn buyback programme. That ongoing buyback is part of the company's approach to returning capital to shareholders alongside dividends.
The business is cyclical. That means earnings and the share price can swing with market and economic conditions. The article notes the share price may already be a bit high relative to fundamentals, which increases the risk of near-term volatility. For investors who want predictable, buy-and-hold income, this cyclical profile is a caution: Legal & General can suit long-term holders but may be less comfortable for those who need steady short-term income without price moves.
Yield versus stability: peers and alternatives
If you focus only on headline yield, other stocks sometimes look more attractive. Ithaca Energy, for example, showed a forecast yield around 11.5% at the time of writing — but that comes with an erratic dividend history and analyst forecasts suggesting payouts could fall by 2028. The article suggests that makes Ithaca less suitable for a 'buy and forget' income strategy.
How to think about Legal & General now
Legal & General remains a leading choice for UK income-focused investors because of its high forecast yield and long history of consistent payouts. It should be treated as a long-term income holding with cyclical risks. Compare it against other yield opportunities and your own tolerance for share-price swings before committing capital.
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