Bulk annuity market. Record activity and consolidation shape 2025
Insurers maintained a high level of activity in the first six months of 2025 with 160 individual deals completed. This was a record number for the first half of any year (passing 133 from the first half of 2024). It fell narrowly short of the record for any half year (167 deals in the second half of 2024).
Volumes in the first half of 2025 amounted to £9.7 billion, with an additional £16 billion already disclosed since 1 July 2025. We expect an overall 2025 figure of approximately £40 billion is achievable given the number of transactions expected to complete before year-end. The key themes of the first half of 2025 were:
• Greater number of insurers competing for smaller (sub £100m) transactions
• New market entrants’ growing presence, initially on securing smaller schemes
• Full-scheme transactions continue to dominate, only 5 percent of deals appear to represent pensioner buy-ins
2025 has also been marked by significant market activity, with two proposed significant acquisitions - Athora acquiring Pension Insurance Corporation and Brookfield’s proposed purchase of Just Group - both announced in July 2025.
Longevity swap market
While bulk annuities dominate headlines, the longevity swap market has remained active in 2025, with publicly announced volumes already exceeding that seen in the whole of 2024.
With the latest longevity swaps for the BT Pension Scheme and two Lloyds Banking Group pension schemes announced in 2025, and other schemes in the market, we expect UK volumes to exceed £15 billion by the end of the year. In addition, Aon advised on a €4 billion Netherlands longevity transaction for NN Life with Prudential, which was announced in August 2025.
Traditionally longevity swaps had been considered only usually viable for £bn+ schemes. However, in 2025 we are seeing more sub-£1bn schemes considering longevity swaps as part of a de-risking journey. Longevity swaps should not only be considered as just a niche tool, they can be a flexible option for schemes of varying sizes, either as a staging post towards eventual buyout, or as part of a long-term risk management strategy.
Superfund market
In June 2025, Clara announced their fourth transaction - for the c£55m Church Mission Society (CMS) Pension Scheme. This follows the £230m transaction with the Wates Pension Fund in late 2024 which was their first to take covenant exposure from a continuing solvent sponsor. Previous Clara deals were for schemes linked to corporate insolvencies.
The CMS deal is Clara’s first with a not-for-profit employer and the first to use its ‘connected covenant’ structure, that includes some continuing contingent support from the employer.
More broadly, the recent Pension Schemes Bill sets out a framework for superfund authorisation and supervision, with new rules coming into force from 2028. The DWP has stated its intent to ensure that the superfund “market thrives in its potential… for consolidating schemes that cannot reach buy-out,” with further consultation to come. These positive steps, along with Clara showing that transactions are viable for ongoing sponsors in the right circumstances, are likely to encourage more trustees and sponsors to consider if a superfund transaction could be right for them.
Aon Risk Market Update
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