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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.
It’s a familiar FTSE 100 income stock, it’s popular with dividend investors, and it offers the prospect of a second income inside a tax-efficient wrapper.
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Why income investors like it
Legal & General’s 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% – the second-highest on the FTSE 100.
For an ISA investor, the attraction’s simple. Dividends received inside a Stocks and Shares ISA aren’t 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 They can be withdrawn as income or reinvested to buy more shares, helping compounding over time.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. That’s 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 “juicy dividends”. That’s fair, but a high yield isn’t automatically a good yield. Potential investors should still check dividend cover, debt, earnings sustainability and valuation.
Don’t rely on one share
No single share, however popular, should be an investor’s 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 isn’t the only candidate for the title of 2027’s most-bought ISA stock. Along with Lloyds, it’s 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 2027’s 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.
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Mark Hartley owns shares in Legal & General, Lloyds Banking Group, and BAE Systems.
