The total premium from de-risking transactions is anticipated to decrease in the first half of 2025, while the number of transactions is expected to increase, Broadstone’s H1 2025 bulk purchase annuity (BPA) market review has suggested.

The review, which reports on the firm’s experiences advising on transactions in the BPA market through the first half of the year, said this was due to the usual pattern of larger deals being backweighted towards the second half of the year, as well as specific impacts to this H1 2025.

In particular, Broadstone highlighted the considerable macroeconomic volatility around the scope and impact of President Trump’s tariffs, as well as several UK consultations impacting schemes’ endgame decisions, such as run-on and surplus extraction, have concluded.

Broadstone said these factors have driven a “wait and see” approach from larger schemes, but an active pipeline remains, and it expects that £1bn-plus deals will be completed in H2 2025.

In terms of the smaller end of the market, Broadstone said it has been “business as usual” with a significant number of deals being concluded.

The firm noted that this demonstrates continued capacity in the insurance market to serve these schemes, with the growing number of insurers at this end driving competitive pricing.

Broadstone head of trustee services, Chris Rice, said that it had been half of two halves in the BPA market, as at one end larger schemes are “waiting for the dust” to settle and new regulatory options to be considered before progressing to buyout.

Meanwhile, Rice said de-risking for smaller schemes continues to accelerate with the number of deals seeming to be keeping pace with growth in recent years, reflecting growing insurer capacity at this end of the market, meaning that schemes of all sizes can now look to secure a bulk annuity transaction.

“Looking forward, we would expect smaller schemes to continue to look to the insurance market as new entrants continue to expand their presence and the usual cluster of bigger schemes should complete de-risking deals in the second half of 2025,” Rice continued.

“Some schemes may eschew the insurance market and look to run-on given more fluid access to surpluses and healthier funding conditions.

“However, we do not expect this to considerably change the dynamics in the BPA market as there are enough sponsoring employers looking to remove the burden of their defined benefit pension schemes.”

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