More than half (57 per cent) of UK defined benefit (DB) pension schemes are considering surplus extraction during run-on, buyout, or in the years leading up to endgame, according to a report from Legal & General (L&G).

Its Endgame Insights report, which drew on a trustee survey conducted in partnership with the Pensions Management Institute (PMI), explored how rising funding levels were influencing trustees as they approached endgame and the trends shaping endgame strategies.

A “clear majority” of schemes expected insurance to play a key role in their de-risking journey, while a “notable proportion” were exploring run-on approaches, either as a long-term strategy or prior to securing members’ benefits with an insurer.

Over half (57 per cent) of DB schemes were actively considering surplus extraction, which L&G said was consistent with its practical experience, where 24 schemes that moved to buyout in 2025 used surplus to enhance member benefits.

The report noted that trustees and sponsors had been navigating significant shifts in endgame planning over the past year amid rising funding levels, regulatory reform, and a broader set of strategic options.

Almost half (49 per cent) of schemes were now fully funded on a buyout basis, putting endgame planning high on the agenda.

With the government looking to make it easier for well-funded DB schemes to release surplus, trustees considering surplus extraction had mixed preferences for how that surplus should be used.

Enhancing DB scheme member benefits was highlighted as the top priority, closely followed by supporting a defined contribution scheme or returning surplus to the sponsor, while investing in UK assets was seen as the lowest priority.

The report also found confidence in smaller schemes being a significant part of buy-in and buyout transaction volumes going forward, with 84 per cent of respondents believing that being a smaller scheme would not inhibit ability to transact.

When asked about progress on the expected time between buy-in and buyout, 34 per cent of respondents who had completed a buy-in expected to move to buyout within two years, while 41 per cent planned to do so within three to five years.

“The UK’s DB landscape is entering a new phase of maturity,” commented L&G head of UK – institutional & wholesale, asset management, Mark Johnson.

“Our new research shows that schemes now have more choice than ever and endgame is front and centre of their agendas.

“The trustees we speak to are actively considering how they might use surplus, settle their liabilities via an insurer or superfund, or run-on for longer.”

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