LCP’s predictions for the pension risk transfer market in 2026

Pensions & benefits Pension risk transfer Endgame strategy and journey planning Strategic journey planning DB pensions

LCP’s outlook for the PRT market: buy-in volumes, insurer consolidation and a growing focus on members

Following on from our recent PRT report, our annual look-ahead for the pension risk transfer (PRT) market sets out five predictions for what schemes can expect in 2026 and beyond, and what they mean for trustees and sponsors as they assess their endgame strategy.

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Buy-in volumes could reach a record £55bn in 2026
Continued mergers and acquisitions activity in the market
Members to be centre stage in 2026
An expanded range of endgame options
Looking further ahead – technology as a defining market feature

1. Buy-in volumes could reach a record £55bn in 2026

Based on insurer feedback and the strength of the current deal pipeline, we expect UK pension buy-in volumes in 2026 to reach between £40bn and £55bn. Reaching the upper end of the range at £55bn would surpass the previous high of £49.1bn in 2023, but depends on the continuation of the highly attractive pricing conditions that is currently available and was seen over the past year.

Strong scheme funding positions, healthy insurer appetite and sustained competition suggest that the market outlook remain favourable for trustees and sponsors considering a transaction.

Looking nearer-term, we expect confirmed 2025 volumes to exceed £40bn, once insurers publish full-year results in March.

As shown in the chart 'Projected buy-in and buy-out volumes over the next decade'.

2. Continued mergers and acquisitions activity in the market

Mergers and acquisitions were a notable feature of the market in 2025. Three of the eleven insurers active in the UK bulk annuity market announced acquisitions by international investors:

Pension Insurance Corporation was acquired by Athora
Just Group was acquired by Brookfield, with Brookfield’s own insurer, Blumont, set to be merged into Just Group.
Utmost’s life and pensions arm was acquired by US-based JAB Insurance, whose parent group owns consumer brands including Pret A Manger and Krispy Kreme

All three transactions are expected to complete in the first half of 2026.

With the UK bulk annuity market continuing to generate significant asset inflows and long-term growth opportunities, we expect international investors to remain interested in acquiring a direct presence in the market. For schemes, this reinforces confidence in the depth of long-term capital supporting insurer participation and competition.

As shown in the 'entrants and exits' chart.

3. Members to be centre stage in 2026

As increasing numbers of schemes approach buy-out, insurers are placing greater emphasis on administration quality, digital capability and member outcomes. We expect 2026 to mark a step-change in this area:

By the end of 2026, all active insurers are expected to offer online benefit modellers, allowing members to explore retirement options more easily. More than half are also expected to support online self-service retirement journeys. This is a significant shift compared to just two years ago when the majority of insurers did not offer online functionality.
More than 150,000 members are expected to move through to buy-out and receive individual annuity policies during 2026, around a threefold increase on 2024. This reflects 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.

4. An expanded range of endgame options

Over the remainder of the decade, DB superfunds are expected to become an established option alongside traditional insurance buy-out, together with run-on strategies such as the model used in the Stagecoach/Aberdeen transaction, where LCP advised Stagecoach.

LCP expects further new DB superfunds to announce their entry this year joining Clara and TPT.

5. Looking further ahead – technology as a defining market feature

Insurers will use improved technology to produce quotations more quickly and at lower cost, enabling them to cater for the rapidly growing number of smaller transactions. AI-driven automation is expected to make residual risks cover accessible to a wider range of schemes by streamlining and standardising due diligence processes.

Competitive pressure will continue to drive innovation across pricing, asset sourcing and member administration.

What should trustees and sponsors do now?

Review endgame readiness. Strong pricing and high insurer appetite mean this is an opportune time to reassess funding, investment strategy, data quality and benefit specifications.
Keep pace with market developments. Insurer capability, ownership structures and service propositions are evolving rapidly and should be factored into transaction planning.
Focus on member outcomes early. Administration quality and digital engagement are increasingly important considerations when selecting an insurer and planning the transition to buy-out.
Consider the full range of endgame options. With superfunds, run-on strategies and traditional insurance solutions all developing, schemes should revisit their long-term strategy holistically.