10 Effect of economic assumption changes

1.

In 2008, on a best estimate basis, Legal & General Pensions Limited has reserved an additional £313m to allow for credit defaults over the next four years. Risk and Savings economic assumption changes include £272m to reflect the present value and cost of capital of the in-force element of the additional reserve.

Economic assumption changes also includes -£361m relating to the 0.8% increase in the UK risk discount rate from 7.5% to 8.3% during the year.