Defined benefit (DB) pension schemes are securing bulk annuity transactions at record prices amid intense competition among insurance companies, according to research by consultancy group LCP.
The consultancy said insurers’ capacity for taking on new deals was exceeding short-term demand for transactions, and with new entrants to the market coming in, it was benefiting DB schemes “of all sizes”.
Royal London, Prudential, Utmost and Blumont significantly increased their activity in 2025, helping boost the overall transaction numbers and value. Their activity “contributed to more than half of the growth in transaction numbers” year on year, according to LCP.
LCP said buy-in pricing had reached its “most competitive levels yet” in the first three months of this year, and had not been affected by market turmoil driven by the Middle East conflict. Pricing remains attractive with some schemes able to strike even better deals than in the first quarter, LCP said.
Total buy-in volumes reached £38.2bn in 2025 across 367 deals, LCP’s research showed. This value was below the record value for a calendar year and LCP said it did not expect a record year of volumes in 2026.
“Good quality preparation is therefore critical to stand out from the crowd, achieve strong insurer engagement and ensure efficient post-transaction processes.”
Ruth Ward, LCP
Charlie Finch, partner at LCP, said: “Twenty years on from the first buy-in, the UK pension risk transfer market is seeing record levels of competition and choice. Strong insurer capacity and heightened competition have driven the attractiveness of buy-in pricing for LCP clients to unprecedented levels in early 2026.
“For well-prepared schemes, the current market presents a compelling pricing opportunity and gives leverage to negotiate bespoke terms for the benefit of members.”
Finch’s colleague Ruth Ward added: “Competition is no longer limited to the largest transactions, with smaller schemes benefiting from a wider range of insurers actively participating in this segment and improved access to the market. For trustees and sponsors, that creates a real opportunity.
“While market conditions are favourable, it’s important not to lose sight of the fact that hundreds of schemes are now seeking buy-in quotations. Good quality preparation is therefore critical to stand out from the crowd, achieve strong insurer engagement and ensure efficient post-transaction processes.”
LCP again emphasised the importance of customer service as part of an insurance company’s proposition. With buy-ins now regularly covering members who are yet to retire, at-retirement propositions and administration standards are becoming key differentiators.
LCP stated that insurers were responding to this by “enhancing the member experience through innovations such as online benefit modellers and end-to-end self-service retirement journeys”.
“At the same time, increased automation and more streamlined operating models are helping insurers to deliver faster, more efficient retirement quotations and improved support for member interactions, which is helping to ease recent delivery bottlenecks for some insurers,” the consultancy explained.
L&G insures property group’s scheme
Earlier this month, Legal & General (L&G) announced that it had completed a £10m buy-in for the Lowman Pension Scheme, sponsored by Devon-based property Lowman Manufacturing.
The deal was completed in March and insures the benefits of 52 deferred members and 63 pensioners. It follows two previous buy-ins and means the whole membership is now insured.
Broadstone, which advised on the transaction, also took on administration for the scheme as its existing administrator “did not have the experience and capacity to prepare for a bulk annuity market approach”, the consultant said in a press release. It took three months to get the scheme ready for a transaction.
Chris Rice, deal lead and head of trustee services at Broadstone, said: “When we started discussing a potential buy-in last year, with the company setting aside funds to facilitate the transaction, it quickly became clear that dedicated and expert administration support was required. It is satisfying that Broadstone’s administration could deliver market-ready data so quickly and facilitate this transaction with L&G at pace.”
Dominic Moret, head of origination and execution at L&G, explained that the pricing of the deal was linked to assets already managed by L&G’s asset management division.
He said: “The approach helps minimise costs, remove unnecessary market risk, and supports schemes in achieving a well-matched, efficient transition to securing positive outcomes for their members.”
