More than half of defined benefit (DB) pension schemes are expected to complete a bulk annuity transaction over the next five years, according to research from the Society of Pension Professionals (SPP).

The poll, taken during an SPP event on bulk annuity deals, found that 54 per cent of pension professionals thought that around half of their schemes would complete a bulk annuity over the next five years, while 15 per cent expect more than three quarters of their schemes to do so.

Commenting on the findings, SPP president, Steve Hitchiner, said: “The number of pension professionals expecting at least half of their schemes to complete a bulk annuity transaction over the next five years demonstrates the importance of pension de-risking strategies.

“It will be interesting to see whether these predictions prove accurate over the next few years but, regardless, the desire of schemes and sponsors to transfer risk to insurers seems firmly established.”

Demand in the bulk annuity market has remained strong over the past year, with buy-in and buyout volumes reaching a "staggering" £49.1bn in 2023, and continued improvementsin DB pension scheme funding levels.

And a fall in the projected volume of jumbo transactions means that the second half of 2024 is expected to provide an attractive environment for medium-sized pension schemes considering a risk settlement deal.

Industry experts also recently stressed that insurance deals are “entirely achievable” for small defined benefit (DB) schemes, highlighting a number of recent small scheme deals as evidence of the opportunities available for schemes that are prepared and ready.

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