Investing for the long term

When a pension scheme completes a buyout with us, a remarkable chain of events occurs.  Not only do the trustees better secure and protect their members’ benefits, the liabilities transfer from the sponsoring company’s balance sheet to us, thereby putting the company in a better, more sustainable position to capture future growth.

What is often missed, however, is that we will take the premium that is paid to us and invest it in order to back the pension promises that we are now responsible for keeping.  We will invest in corporate bonds and increasingly in large scale infrastructure projects and by doing so, provide financing to companies across the UK and help build the infrastructure that will be the foundation of our future economic growth.

In this way, the savings of the older generations are being used to finance the economic growth of the younger generations and this virtuous cycle gets repeated each time a pension scheme transfers risk to us.

As evidenced by the investments that we are making, we are committed to the pension risk transfer business for the long term.  By coupling this commitment with our financial strength, we are helping the defined benefit pension industry play a socially and economically useful role in our wider society and economy.

At Legal & General, we operate an annuity book that is £63 billion in size and to date, we have made £19 billion in direct investments across our group.

Examples include:

Newcastle Science Central

Partnering with Newcastle City Council and Newcastle University on the £350 million Newcastle Science Central, one of the biggest urban regeneration projects of its kind in the UK.  The 24-acre science and technology hub is set to create over 4,000 jobs, 500,000 square feet of office space and 450 new homes.

Legal & General Homes

The launch of our modular housing business, Legal & General Homes, which will seek to modernise the home building industry by providing modern, precision engineered, factory manufactured houses through our new factory in Sherburn-in-Elmet, 15 miles east of Leeds.  Over 400 jobs are being created in the Leeds area.

Legal & General Homes website

UK investment projects

Including £53 million committed to the Dover Regeneration project, £250 million investment in DP World’s London Gateway Port and the purchase of the Transport for London (TfL) Building at the International Quarter in Stratford for £245 million.

You can find out more about our direct investments and activities by visiting our group website.