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Prediction: Legal & General Will Be The Most-bought Passive Income Share In A Stocks And Shares Isa In 2027

Could Legal & General (LSE:LGEN) become one of the most-bought shares in a Stocks and Shares ISA in 2027? I think it has a real chance.

Itâs a familiar FTSE 100 income stock, itâs popular with dividend investors, and it offers the prospect of a second income inside a tax-efficient wrapper.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Why income investors like it

Legal & Generalâs appeal is almost entirely based on its dividend. After paying a chunky 21.79p per share in 2025, it raised its latest interim payout by 2% to 6.24p per share. At that rate, the 2026 total could reach 22.23p.

At recent prices, Hargreaves Lansdown puts the trailing yield at about 7.3% â the second-highest on the FTSE 100.

For an ISA investor, the attraction’s simple. Dividends received inside a Stocks and Shares ISA arenât subject to further UK income tax. They can be withdrawn as income or reinvested to buy more shares, helping compounding over time.

The business also offers exposure to UK retirement savings, pensions and asset management. Thatâs a useful long-term theme as more people look for ways to fund later life.

AJ Bell‘s previously described Legal & General as popular because of its âjuicy dividendsâ. Thatâs fair, but a high yield isnât automatically a good yield. Potential investors should still check dividend cover, debt, earnings sustainability and valuation.

Donât rely on one share

No single share, however popular, should be an investorâs entire ISA strategy. Like all stocks, Legal & General faces risks. Not only is it an insurer, it’s also an asset manager. That makes it sensitive to market conditions, regulation, interest rates and investor sentiment.

If markets fall or costs rise, profits and dividends usually come under pressure. That can prompt a dividend cut, and suddenly that high yield is nothing more than a distant memory.

Diversification helps spread this risk across different sectors, regions and asset types, reducing the impact if one area falters.

Moreso, L&G isnât the only candidate for the title of 2027âs most-bought ISA stock. Along with Lloyds, itâs often near the top of ISA buying lists. Nvidia, BAE Systems and Rolls-Royce have also been prominent among ISA holders.

How the rivals compare

Share	Main appeal	Drawback for income investors
Lloyds	Major bank and regular ISA favourite	Returns rely on the banking cycle and interest rates
Rolls-Royce	A powerful UK growth story	More a growth holding than a dividend play
BAE	Direct exposure to defence spending	Less suitable for investors prioritising income
Nvidia	A leading AI investment	A modest yield and a more volatile share price

Lloyds already topped an ISA buying list in early October, while Rolls has delivered exceptional five-year share-price gains. But past performance is no reason to concentrate an ISA in one company.

A smart way to target income

Legal & General has a credible case to be among 2027âs most-bought ISA shares for second-income investors. Its yield, dividend record and familiar brand make it an obvious candidate to consider.

More risk-averse investors targeting resilient income might allocate more heavily into a broad dividend fund, supported by individually strong income shares.

Equally, growth holdings can help avoid an ISA becoming too dependent on income stocks.

What income stock do we like better than Legal & General Group Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

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Mark Hartley owns shares in Legal & General, Lloyds Banking Group, and BAE Systems.

The post Prediction: Legal & General will be the most-bought passive income share in a Stocks and Shares ISA in 2027 appeared first on The Twelfth Magpie.

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