Articles - The outlook for the BPA market in 2026

By Claire Altman, Managing Director for BPA & Individual Retirement at Standard Life: comments on 

 

Trustees are navigating a landscape rich with choice, particularly around funding surpluses and how far to go in their de-risking journeys. These decisions underscore the growing complexity and maturity of the BPA market. With more providers and structuring options than ever before, 2026 is set to be a year where choice—not just timing—defines success.

 

Central to the evolving market is the UK Government’s Pension Schemes Bill, which proposes reforms to unlock DB scheme surpluses. These reforms aim to support both member outcomes and broader economic growth. Yet, trustee sentiment remains divided, with two-fifths of trustees uncomfortable with the reforms.[1].

 

However, there’s significant jeopardy for schemes who decide to wait until the regulations to facilitate surplus extraction come in, and in doing so run the risk of missing an opportunity to complete a BPA transaction if pricing changes or scheme funding levels deteriorate.

 

From our engagement with trustees, we know there are different views, with 38% saying they would enhance member benefits and a similar number supporting sponsor business growth and reduced employer contributions.  This demonstrates the need for bespoke approaches that work for individual schemes, as well as the regulatory challenge of ensuring decisions are being made in the right way and reflect both trustee and sponsor considerations.

 

With elements of regulatory ambiguity across the regulatory spectrum, including how any new structures look set to be governed we anticipate trustees will continue to favour insurance-based solutions in the year ahead. Our research from autumn 2025 revealed that 48% of DB schemes identify buy-in as their preferred endgame strategy, with 40% of these planning to approach an insurer within the next 12 months.

 

Strong funding levels - 45% of schemes fully funded or in surplus - are driving this demand and enabling trustees to act with confidence. This momentum reflects a strategic shift: trustees are continuing to prioritise certainty and security for members, with buy-in seen not just as a tactical move, but as a long-term solution aligned with fiduciary duties and scheme wind-down goals.

 

2025 was noted for the growing breadth of choice in the BPA market. While this expansion has driven further improvements in already attractive pricing, it has also led insurers to become more selective in how they allocate resources.  With transactions throughout 2025 attracting bids from up to nine providers, it’s expected that heightened competition will continue into at least the first half of 2026 leading to continued competitive pricing across the market.

 

As pricing remains strong, schemes in surplus are shifting their focus beyond cost alone

Trustees are increasingly prioritising non-price factors to secure long-term value for members. This presents a clear opportunity to differentiate through thoughtful preparation and targeted engagement, focusing on insurers whose capabilities match the scheme’s size, structure, and goals. At the same time, the ability to move swiftly to buy-out is becoming a critical factor. With the backlog of buy-in transactions awaiting conversion to buy-out rising from under 100 to 250 between 2023 and 2024, trustees are placing greater value on insurers that offer a clear and efficient path to full settlement[2].

 

As a result, in the year ahead, those providers with proven operational readiness and the capacity to manage complex transactions smoothly are in high demand—not just for their pricing, but for their ability to deliver certainty and a high-quality experience for members.

 

Providers wishing to capitalise on favourable market conditions will continue to invest in their proposition while also benefiting from the significant investments made since 2020. In building specialist teams and technology to support schemes, there is a focus on ensuring a smooth and efficient journey to securing member benefits.

 

Bespoke solutions to address scheme-specific challenges, including managing liquidity, supporting hybrid DB/DC schemes and insuring against residual risks will remain pivotal in the market. This will be further underpinned by a focus on enhancing member experience through digital communication tools that improve transparency and engagement. While the adoption of AI in the BPA space has been in its infancy, we expect it to be a rich source of potential to transform operational efficiency and client service.

 

As the BPA market kicks off in 2026, trustees face a landscape defined by both opportunity and complexity. With strong funding levels, evolving regulation, and heightened insurer competition, the ability to act decisively and strategically has never been more critical.

 

Success will depend not only on securing attractive pricing, but also on choosing the right partners who can work innovatively and collaboratively enabling schemes to navigate regulatory change with confidence and aligning endgame strategies with long-term member outcomes.