Buy-in volumes could reach a record £55bn in 2026, prompting acquisition activity among bulk annuity insurers, according to forecasts for the pension risk transfer market.
Consultancy firm LCP said it expects that buy-in volumes will be between £40bn to £55bn this year, with record volumes possible, given the strong pipeline of transactions reported by insurers.
The current record volume is £49.1bn in 2023. It says it expects 2025 volumes to exceed £40bn when reported with insurers’ full year results in March.
LCP says that there would need to be a continuation of the current attractive pricing in order for the market to reach the top end of its forecast.
It adds that mergers and acquisitions have been a key feature of this market last year, with three of the eleven insurers active in the bulk annuity market announcing acquisitions by international insurers.
Pension Insurance Corporation (PIC) was acquired by Athora, and Just Group by Brookfield – both in July – followed, shortly before Christmas, by the acquisition of Utmost’s life and pensions arm by US-based JAB Insurance, whose parent group owns consumer brands including Pret A Manger and Krispy Kreme. All three acquisitions are set to complete in the first half of 2026.
With the UK bulk annuity market set to remain highly active, LCP anticipates continued interest from overseas investors in further acquisitions, driven by the scale, maturity and significant asset inflows into the UK bulk annuity market.
LCP adds that that member service will be a key focus this year as insurers continue to invest in administration platforms and digital capability.
It says that by the end of 2026, its expect all of the active insurers to be able to offer members online benefit modellers, giving the members they are administering increased flexibility to assess their different retirement options — and over half the insurers will offer online self-service retirement.
Expanding digital offerings is a key focus for insurers, with the majority of insurers not offering online functionality two years ago.
LCP says that over 2026, more than 150,000 pension scheme members will be moved to buy-out and receive individual annuity policies. This represents a threefold increase on the 50,000 policies issued in 2024, reflecting an increase in schemes completing their preparatory work ahead of buy-out and insurers committing significant resource to enable more schemes to complete the transition to buy-out and wind-up.
LCP partner Charlie Finch says: “The UK buy-in market continues to demonstrate remarkable depth and strength alongside an expanding range of wider endgame options.
“Our forecast of £40–55 billion of buy-ins in 2026 reflects robust funding levels and a substantial pipeline of deals, supported by highly competitive insurer pricing. The strategic acquisitions of insurers last year should give schemes confidence in the depth of long-term investor backing for the market, reinforcing competition and driving continued innovation over the rest of the decade.”
Imogen Cothay, partner at LCP, adds: “The market is increasingly evolving to meet the needs of pension schemes and their members.
“Insurers are investing heavily in technology, with administration and member experience being a strategic priority. This will benefit schemes of all sizes, with more efficient journeys to buy-out, and a boost in online functionality for members as digital engagement becomes the norm.”
