The UK bulk purchase annuity (BPA) market is on track for a record-breaking 350 transactions in 2025, with total volumes expected to exceed £40bn for the third consecutive year, analysis from LCP has found.

The firm's analysis of insurers’ half-year 2025 results and recent transaction announcements revealed that activity levels over the first half of the year reached another record, as over 155 buy-in and buyout transactions were completed by UK schemes.

This represents a 20 per cent increase on H1 2024, when 133 transactions were completed, and represents "significant and sustained" 23 per cent per annum average growth over the three years to 30 June 2025.

This was primarily driven by smaller schemes, as sub-£100m buy-ins/outs accounted for over 85 per cent of all transactions by number in the first half of the year, up from 78 per cent for the 2024 financial year and around 70 per cent in 2022 and 2023.

But despite record activity, total buy-in and buyout volumes in H1 2025 were relatively muted at £9.7bn, the lowest since 2021, down from £15.2bn in H1 2024 and a record £21.1bn in H1 2023.

This was due to the fall in larger deals, as LCP pointed out that there was only one transaction over £1bn in H1 2025, an unnamed £1.1bn buy-in with L&G.

However, volumes have picked up "substantially" as the industry moves into the second half of the year, with around £8bn of transactions already announced, including two buy-ins over £1bn - the £4.3bn full buy-in by the Rolls-Royce UK Pension Fund with Pension Insurance Corporation (PIC), and Standard Life’s £1.9bn full buy-in for the Sedgwick Section of the MMC UK Pension Fund.

L&G comfortably wrote the largest buy-in/out volumes in H1 2025 at £3.3bn (34 per cent market share), followed by Aviva (21 per cent market share), Just (17 per cent market share) and PIC (11 per cent market share), all writing over £1bn.

However, changes in the BPA market could be on the horizon, as LCP noted that 2025 has been marked by a series of announcements by large North American asset managers seeking a direct presence in the UK BPA market.

Indeed, Brookfield Wealth Solutions has announced plans to acquire Just, while Athora announced an agreed acquisition of PIC, with US manager Apollo set to be a key shareholder, and L&G have entered into a strategic partnership with Blackstone.

LCP partner, Charlie Finch, highlighted the growing interest in the UK market as a "robust voice of confidence", which should provide further capacity as increasing numbers of well-funded UK pension schemes seek to insure their DB liabilities.

"It should also help to offset any impact on capacity should the PRA proceed with a clampdown on Funded Reinsurance," he stated.

LCP pointed out that other new insurer entrants have also continued to make inroads, with M&G, Royal London and Utmost collectively writing c£1bn of new business in the first half of the year.

In contrast to the fall in buy-in and buyout volumes, LCP revealed that longevity swap volumes increased with £15.1bn of liabilities hedged in H1 2025, up from £0.8bn in the same period last year.

Adding to this, LCP principal, Ruth Ward, said: “Looking more widely, we expect Clara-Pensions’ innovative ‘connected-covenant’ DB superfund transfer for the Church Mission Society and the superfund regulatory framework to be introduced through the Pension Schemes Bill 2025 to give rise to further momentum in the UK DB superfund market as an alternative to insurance for schemes that are underfunded on buy-out.

“Finally, the newer insurer entrants have really started to make their mark in 2025, with M&G and Royal London each reaching milestone volumes of £1bn and Utmost steadily working through their initial transactions.

"Their increasing participation in buy-in processes is helping to drive not only greater competition and attractive pricing but also wider improvements in insurers’ non-price offerings where innovations in areas such as member experience are allowing insurers to differentiate themselves in a competitive market.”

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