Finance and Capital Management

Uses of capital Financial strength and attractive dividends Financial strength Assessing our position relative to: Solvency ratio¹ Pro forma H1 170% Comfortable level given the nature of the business we are writing Dividend policy Expectations for ordinary dividends: Leverage ratio² 1 Stable or increasing in absolute terms over time Starting position at 34% Underpinned by strong Heritage cashflows • Aim to reduce gradually over time 2 Two dividend payments per year interim dividend being 1/3 of the previous full year 3 2019 final ordinary dividend of £310m³ implying an "as-if" full year ordinary dividend of c. £465m³,4 4 To develop broadly in line with capital generation over the longer term HoldCo Liquidity Ensure sufficient liquid resources to cover expected cash outflows for at least 1 year, including dividend 1. Group shareholder SII ratio; 2. Nominal value of debt as % of total Group Own Funds. 3. Subject to the Company's financial performance and overall financial position remaining in line with expectations; 4. M&G plc expects³ to declare a one-off demerger related dividend of £100m in recognition that, for the majority of 2019, it was operating without incurring certain costs, e.g. debt interest costs, which it would expect to bear in future and which have been allowed for in determining the initial level of ordinary dividend. 63

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