Pension risk transfers could hit £40bn by 2026
UK pension risk transfer volumes are projected to fall between £35 billion and £40 billion in 2026, according to a forecast from Standard Life.
Market activity splits between cautious and aggressive schemes
Standard Life’s managing director for pension risk transfer and individual retirement, Claire Altman, said the market remains “highly active.” Some trustees have paused to review end‑game options, while others continue to move forward, taking advantage of competitive pricing in the bulk purchase annuity (BPA) market.
Altman noted that “the remainder of 2026 will be defined by this divergence in approach, as schemes respond to the current mix of market opportunity and evolving regulatory clarity.” The split reflects differing risk appetites and the impact of recent legislative changes.
She expects a shift in the second half of the year, with activity moving from small and mid‑size deals to “multi‑billion pound schemes coming to market.” Timing, she warned, could affect both total market volumes and pricing patterns.
Regulatory uncertainty drives preference for buy‑ins and buyouts
The Pension Schemes Act has sharpened focus on end‑game strategy, especially the balance between run‑on, insurance, and surplus usage. Yet much detail remains pending, leaving many trustees unsure whether to act now or wait.
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Altman argued that “ongoing uncertainty and market risk meant many trustees were still likely to favour buy‑in and buyout to lock in gains and provide certainty for members.” Non‑price factors, such as member experience and the transition from buy‑in to buyout, are expected to dominate the discussion for the rest of the year.
She added that “propositions are evolving towards more personalised tools, additional guidance and digitally enabled or AI‑supported member interactions.” The availability of multiple communication channels, including telephony services and digital portals, is seen as the best way to meet varied member preferences.
In practice, this means trustees who have already mapped out their end‑game and prepared for execution will likely be better positioned. With favourable pricing and strong insurer appetite, there remains a clear window of opportunity for those ready to transact.
Overall, the key trend shaping the UK PRT market in the second half of the year will be the choices individual schemes make, Altman concluded. Schemes that are already committed to their end‑game strategy and well prepared to proceed are likely to be in a strong position to act.
