This year will likely rank as the second-largest year in the history of the UK pension risk transfer market overall, with a total volume of £30–£35bn, according to Legal & General.
The most recent edition of the Global PRT Monitor, which examines market trends and industry developments in the UK and US, showed that in the UK, volume is anticipated to be over £12bn in the first half of 2022. This would be a roughly 50 per cent increase from the first half of 2021. The volume could approach £35bn depending on how many significant transactions close this year.
Legal & General Retirement Institutional managing director pension risk transfer Chris DeMarco says: “The PRT sector in the UK is yet again proving itself to be an exciting and valuable contributor to the national economy. Thanks to favourable market conditions pension scheme funding levels are improving and buyout affordability is increasing. Insurers are working hard to meet the increased demand from pension schemes and we expect transaction volumes to continue to grow in future years.
“Our message for pension schemes considering a buy-in or buyout transaction in this busy market is simple – schemes who engage insurers early, have flexible timeframes and have prepared thoroughly put themselves in the best position to secure a transaction which best meets their needs.”