Figures issued today by LCP show that, for the first time, the pension buy-in, buy-out and longevity swap market in the UK totalled more than £10 billion in a calendar year.
For 2011 the total deal volume was £11 billion, with the number of deals peaking in the fourth quarter of 2011.
Over the course of the year, pension buy-in and buy-out deals exceeded £4 billion and longevity swaps - including deals for the ITV, Rolls Royce, British Airways and Pilkington pension schemes - totalled £7 billion.
Clive Wellsteed, LCP's Head of Buy-out, said: "The dynamics in the fourth quarter were particularly interesting - three high-value longevity swaps, two high-value PPF rescue cases and a stream of pensioner buy-ins. In effect, three completely different types of transaction.
Looking forward, LCP expects pensioner buy-ins to underpin the market's growth in 2012, particularly for schemes already invested in gilts. Current pricing means that pensioner transactions can often be closed with no impact on the funding deficit or agreed cash contributions."
He concluded: "In an environment of low yields a pensioner buy-in is a concrete de-risking step, for companies and trustees, that doesn't have a large price tag attached. This simple fact should help ensure that business volumes exceed £10 billion in 2012."
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