The U.K. pension risk transfer market—driven by plan asset surpluses—is expected to continue its growth trajectory this year, according to WTW’s annual “De-Risking Report.”
The firm forecast the U.K. PRT market to reach more than 70 billion pounds ($95 billion) this year, an approximate 15% increase from last year. WTW expects the bulk annuity market to exceed 50 billion pounds, while longevity swaps—which transfer the longevity risk of plans, based on their members, to insurers—are expected to exceed 20 billion pounds in activity.
“The risk transfer market is entering 2026 with strong momentum,” said Gemma Millington, WTW’s senior pensions risk transfer director, in a statement. “Schemes continue to benefit from improved funding levels and strong insurer appetite, which together create very favorable conditions in which to secure members’ benefits at compelling prices. We expect this window to remain open through 2026, but trustees will need to be prepared and strategic to take full advantage.”
The WTW report noted that favorable insurance pricing, strong competition in the market and production innovation are supporting growth in the market.
According to the Pension Protection Fund’s PPF 7800 Index, which tracks the funded surpluses of U.K. defined benefit plans, these plans had a combined 265.6-billion-pound surplus of plan assets relative to their liabilities—a funding ratio of 131%. The significant surpluses have been a driver of de-risking activity in the U.K. pension market.
While larger deal activity in the market was more muted last year than in prior years, transactions picked up in the second half of 2025 with mega deals such as Rolls Royce’s 4.3-billion-pound bulk annuity buy-in with the Pension Insurance Corp. and the BP Pension Fund’s 1.6-billion-pound buy-in with Legal & General.
WTW noted that a record 350 buy-in transactions were completed in 2025, but activity was largely driven by smaller deals. Last year, only six transactions of at least 1 billion pounds were announced, down from 14 in 2024.
“Whilst some large schemes have paused to reflect on their end game strategy in light of the proposals on surplus sharing in the Pension Schemes Bill 2025, for many it is simply a question of when they are ready to approach the market, and insurers are already reporting strong pipelines of transactions over £1 billion for 2026,” the report stated.
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Tags: Pension Risk Transfer, WTW