LCP: £55bn UK buy-ins hinge on ‘highly attractive’ pricing
LCP’s 5 January annual look-ahead forecast said UK buy-in volumes could reach £55bn, with insurer capacity estimated at up to £70bn, putting a new market high within reach if pricing remains favourable. Reaching the upper end of the range would surpass the £49.1bn high recorded in 2023, while confirmed 2025 volumes were expected to exceed £40bn once insurers published full-year results in March.
The capacity estimate rests on stronger scheme funding, a substantial transaction pipeline and competitive insurer pricing. LCP said the top end of the forecast depended on the continuation of the “highly attractive” pricing seen over the prior year, alongside the pipeline reported by insurers.
The investment backdrop remains central to transaction economics. In its 2025 pension risk transfer report, LCP said higher gilt yields directly reduce buy-in prices, lowering volumes, all else equal, and that the timing and size of large transactions are likely to be the biggest single factor driving future annual volumes.
Capital backing the market is also shifting. LCP said three of the eleven insurers active in UK bulk annuities had announced acquisitions by international investors: Pension Insurance Corporation by Athora, Just Group by Brookfield, and Utmost’s life and pensions arm by JAB Insurance. Brookfield’s insurer Blumont was due to merge into Just Group, and all three transactions were expected to complete in the first half of 2026.
That overseas ownership points to a deeper pool of long-term capital behind insurer participation and competition. LCP also cited capacity growth from the Just and PIC acquisitions and from strategic partnerships such as L&G’s with Blackstone, while around 10% of total appetite in 2026 was indicated as coming from newer entrants M&G, Royal London and Utmost.
The longer-dated pipeline remains large, though below the previous year’s projection. LCP projected £350bn to £550bn of buy-ins over the next decade, with annual buy-in/out volumes expected to peak at the turn of the decade; the latest range was a modest reduction from the prior £400bn to £600bn forecast, which had projected a 2028 peak.
The member-transition workload is expected to rise alongside transaction flow. LCP expected more than 150,000 members to move through to buy-out and receive individual annuity policies during 2026, around a threefold increase on 2024, reflecting more schemes completing preparatory work and insurers committing resources to help schemes reach buy-out and wind-up.
LCP also noted a shift in insurer service capability, with online functionality becoming more common compared with two years earlier, when most insurers did not offer it. That operational build-out matters because higher buy-out volumes require insurers to administer individual policies at scale, not just price and execute bulk transactions.
Mergers and acquisitions were already a prominent feature of the market in 2025, and LCP said further activity among bulk annuity insurers was possible over the next few years. Outside the insurance route, it also expected further defined benefit superfunds to announce market entry, joining Clara and TPT.
--- Sources: https://www.lcp.com/en/insights/in-brief/lcp-s-predictions-for-the-pension-risk-transfer-market-in-2026
Sources: lcp.com
