With Rothesay’s H1 2025 results released today, full data is now available on UK buy-ins and buy-outs over the first half of 2025.
Key findings include:
• Activity levels over the first half of the year reached another record as over 155 buy-in/out transactions were completed by UK pension schemes, with 2025 on course to reach 350 transactions for the full year. Transaction numbers are up by almost 20% on H1 2024 (133 transactions) and represent significant and sustained 23% pa average growth over the three years to 30 June 2025, primarily driven by smaller schemes. Sub-£100m buy-ins/outs accounted for over 85% of all transactions by number in H1 2025 (up from 78% for FY 2024 and c70% for FY 2022 and 2023).
• Despite record activity, total buy-in/out 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 reflected that that there was only one transaction over £1bn in H1 2025, an unnamed £1.1bn buy-in with L&G. This compares to two in H1 2024 and five in H1 2023 including much larger transactions (eg NatWest’s £3.4bn with Rothesay in H1 2024, and British Steel Pension Scheme’s £2.7bn with L&G and RSA’s £6.5bn with PIC in H1 2023).
• However, volumes have picked up substantially in the second half of the year, with around £8bn of transactions already announced including two buy-ins over £1bn. These were the £4.3bn full buy-in by the Rolls-Royce UK Pension Fund with PIC – making it the largest UK scheme to reach full insurance at c£9bn – and Standard Life’s £1.9bn full buy-in for the Sedgwick Section of the MMC UK Pension Fund – the insurer’s largest transaction to date.
• L&G comfortably wrote the largest buy-in/out volumes in H1 2025 at £3.3bn (34% market share), followed by Aviva (21% market share), Just (17% market share) and PIC (11% market share), all writing over £1bn.
• 2025 has been marked by a series of announcements by large North American asset managers seeking a direct presence in the UK BPA market. March saw Blumont become the first brand-new insurer entrant to the UK market since 2007, taking the market to a record 11 insurers, but this was quickly followed by their parent company, Brookfield, announcing an agreed acquisition of Just in July with plans to merge Blumont into Just. July also saw Athora announce an agreed acquisition of PIC, with US manager Apollo set to be a key shareholder, and L&G enter into a strategic partnership with Blackstone.
• The other new insurer entrants have 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. M&G and Royal London have also now each written over £1bn of volumes since formally entering the market in 2023 and 2024 respectively, with Royal London announcing its largest external transaction to date in early June 2025, a £275m buy-in by the Grant Thornton Pensions Fund.
• Clara-Pensions announced the UK’s fourth DB superfund transfer in June 2025, a “Connected Covenant” deal with the Church Mission Society where the scheme retains a link to the original sponsor covenant. Following previous Clara-Pensions transfers for active and insolvent sponsors, this innovative transfer highlights another situation where a DB superfund could be an appropriate endgame option.
• Longevity swap volumes increased with £15.1bn of liabilities hedged in H1 2025 (FY 2024: £0.8bn). This was £10bn by the BT Pension Scheme and £5.1bn by Lloyds Banking Group schemes. Both BT and the Lloyds Banking Group have each now transacted over £20bn of longevity hedging in total across their schemes.
• The PRA has continued to make statements about the risks posed by Funded Reinsurance, setting out further steps they plan to take in a speech on 18 September 2025. Read LCP’s comments here.
Charlie Finch, Partner at LCP, commented: “The first half of 2025 saw continued strong growth in transaction numbers and, whilst buy-in volumes were down, they have accelerated in the second half of the year. We were delighted to help the Rolls-Royce UK Pension Fund complete their £4.3bn buy-in in August and expect £30bn+ of buy-ins in H2 in total, taking full-year volumes to over £40bn for the third consecutive year with transaction numbers on course to hit a record 350 buy-ins.
“The summer has been marked by a series of significant announcements by North American asset managers seeking a direct presence in the UK bulk annuity market, including acquisitions of Just and PIC and L&G’s strategic partnership with Blackstone. This is a robust vote of confidence in the UK market and 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.”
Ruth Ward, Principal at LCP, commented: “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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