WTW forecasts £70 billion of UK pension risk transferred to insurers and reinsurers during 2026, about 15% above 2025 and 43% above the previous record of £49.1 billion set in 2023. The forecast splits into more than £50 billion of bulk annuity business and up to £20 billion of longevity swaps. Three of the eleven active bulk annuity insurers changed owners over the same period.

Key Takeaways

  • £210 billion aggregate surplus across UK DB schemes on a low dependency basis at March 2026, a 123% funding level, and £140 billion at roughly 114% funded on a full buyout basis.
  • 60% of UK DB schemes are now in surplus on a buyout basis against roughly 10% before the 2022 gilt dislocation, with LCP projecting 80% within five years.
  • 83% of 2025 deals fell below £100 million, and transactions under £10 million rose to 119 from 58 in 2023.
  • 150,000 members are expected to complete the move to individual annuity policies during 2026, roughly three times 2024 volumes.

Volume Built From Small Deals and High Funding

YearBulk Annuity VolumeDeals CompletedNotes
2023£49.1B227Prior record year
2024£47.8B29329% increase in deal count
2025~£38-40B367Record deal count; shift to smaller transactions
2026 (forecast)£50B+N/AWTW upper-range forecast

The composition changed before the total did. 2025 set a record deal count at 367 while volume fell to roughly £38 to £40 billion, because the median transaction got much smaller: 83% below £100 million, and 119 deals under £10 million against 58 in 2023. Buyout stopped being a facility for the largest schemes only.

LCP's own range for 2026 buy-ins and buyouts is £40 billion to £55 billion, with the top end conditional on pricing holding, and it projects a pipeline of £350 billion to £550 billion over the coming decade.

The funding position underneath is the strongest in the history of UK defined benefit. PwC put the aggregate surplus at £210 billion on a low dependency measure in March 2026, a 123% funding level, and £140 billion at about 114% funded against insurer pricing.

Gilt yields did that. The September 2022 mini-budget forced emergency collateral calls on liability-driven investment strategies, and the higher rate environment that followed cut the present value of liabilities faster than asset values fell, moving aggregate funding from 103% to 118% across 2022. The 30-year gilt reached 5.7% in early September 2025, above the 2022 panic level, and LDI managers now hold buffers sized for at least a 300 basis point real yield rise against roughly 100 basis points in 2022. Schemes can now negotiate without an interim yield spike breaking the transaction.

The Counterparty Is No Longer the Entity You Diligenced

Three of eleven active insurers announced sales to international investors during 2025, all completing or expected to complete in the first half of 2026.

Athora agreed in July 2025 to acquire Pension Insurance Corporation Group from a consortium led by Reinet Fund at 49.5%, ADIA at 18.4%, CVC at 17.4% and HPS at 10.2%, completing in March 2026 behind EUR 3.5 billion of common equity commitments. PIC held £54.8 billion of assets and nearly 450,000 policyholders at completion, and represents about 45% of the combined group's EUR 139 billion under management.

Brookfield Wealth Solutions took Just Group at 220 pence per share, a 75% premium, completing April 1, 2026, and will merge its existing UK insurer Blumont into the Just platform. JAB Insurance is buying Utmost's Life and Pensions division, more than £5 billion of assets and about 290,000 pensioners, in its first entry into the UK market.

The pricing question is the visible one and the smaller one. Each acquirer runs a different model: Athora as a European savings consolidator, Brookfield as an asset-origination-led insurer, JAB as a new entrant deploying permanent capital. Mandates that pull toward particular deal profiles change which schemes see competitive quotes.

The durable consequence is in the covenant assessment. Trustees selecting an annuity provider are required to evaluate insurer financial strength, and for PIC that analysis was written against a four-investor consortium with a 20-year history. It now describes a single strategic owner intending to relocate its corporate and legal headquarters from Bermuda to the UK by late 2027. Nothing about the regulated entity's balance sheet changed on completion day; everything about the entity standing behind it did.

That extends the actuary's work down the reinsurance chain. Private-capital-backed insurers commonly use affiliated reinsurance to run capital efficiently, and longevity cessions to affiliated offshore entities are where a bulk annuity's risk actually comes to rest. A buy-in priced against one of these carriers is a claim on that chain, not only on the UK entity, and the PRA's scrutiny of offshore cessions and the NAIC's parallel work on capital treatment for PE-backed life insurers both point at the same structure from opposite sides.

The Binding Constraint Is Data, Not Capital

Roughly 150,000 members are expected to complete the conversion from buy-in to individual annuity policies during 2026, about three times 2024 volumes, with some estimates above 300,000 across all stages of the pipeline.

Conversion is not a pricing exercise. It requires data cleansing, benefit reconciliation against scheme rules, Guaranteed Minimum Pension equalisation, and individual policyholder communication, each with actuarial input. Schemes that completed buy-ins in 2024 and 2025 are queued behind that work now.

The asymmetry is what makes it a risk rather than a delay. An error in benefit data caught before buyout is a correction; the same error found after individual policies are issued is expensive and slow to unwind, because the counterparty relationship has moved from the scheme to each member. TAS 100 and the Actuaries' Code place the care obligation on the actuary doing the verification, and volume pressure is precisely the condition under which that obligation is hardest to meet.

PIC illustrates the throughput problem at scale, paying more than £19 billion in pensions to nearly 450,000 existing policyholders while onboarding new schemes, including the Rolls-Royce UK Pension Fund's £4.3 billion full buy-in with its multi-employer structure and benefit variations.

Competition at the small end is arriving into the same bottleneck. Clara Pensions has completed five superfund transactions since the Sears scheme's roughly 9,600 members transferred in November 2023, and its pipeline now runs to over 30 schemes between about £30 million and £2 billion. WTW expects two further superfund entrants to clear The Pensions Regulator's assessment during 2026. They compete for the sub-£100 million segment that was 83% of last year's deals, and every scheme they take carries the same data preparation the insurers are already queued on.

Further Reading

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