Buy‑in pricing for defined benefit pension schemes has reached its most competitive level in years, as insurers vie for bulk‑annuity business, according to a recent report by consultancy firm LCP.
Insurers ramp up activity, driving record‑high competition
In the first quarter of 2026, the market saw a surge of capacity that outstripped short‑term demand for new deals. The influx of insurers, including Royal London, Prudential, Utmost and Blumont, boosted both the number of transactions and their total value. Those four firms alone accounted for more than half of the year‑on‑year growth in deal volume.
The consultancy highlighted that pricing remains attractive despite geopolitical turmoil stemming from the Middle East conflict. “Pricing has not been affected by market turmoil,” the report noted, adding that some schemes have secured even better terms than those offered in the first quarter.
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Volume figures and outlook
Total buy‑in volumes reached £38.2 billion across 367 deals in 2025, according to LCP’s data. While the figure fell short of the record annual total set previously, the firm does not anticipate a new volume record for 2026. “Good quality preparation is therefore critical to stand out from the crowd, achieve strong insurer engagement and ensure efficient post‑transaction processes,” the report emphasized.
Charlie Finch, a partner at the consultancy, said the market is experiencing “record levels of competition and choice.” He added that strong insurer capacity and heightened competition have driven the attractiveness of buy‑in pricing to unprecedented levels in early 2026. For schemes that come prepared, Finch said, “the current market presents a compelling pricing opportunity and gives leverage to negotiate bespoke terms for the benefit of members.”
Ruth Ward, also of LCP, noted that competition is no longer limited to the largest transactions. Smaller schemes are now benefiting from a broader range of insurers actively participating in the segment, which improves access for trustees and sponsors.
Focus on member experience and service
The consultancy stressed that insurers are increasingly differentiating themselves through customer service. As buy‑ins regularly cover members who have not yet retired, “at‑retirement propositions and administration standards are becoming key differentiators,” it explained.
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Insurers are responding by enhancing the member experience with tools such as online benefit modellers and end‑to‑end self‑service retirement journeys. Increased automation and more streamlined operating models are also helping deliver faster quotations and better support for member interactions, easing recent delivery bottlenecks.
Case study: Legal & General completes £10 million buy‑in
Earlier this month, Legal & General (L&G) announced the completion of a £10 million buy‑in for the Lowman Pension Scheme, which is sponsored by Devon‑based property firm Lowman Manufacturing. The deal, finalized in March, insures the benefits of 52 deferred members and 63 pensioners, completing the scheme’s full coverage after two prior buy‑ins.
Broadstone, the advisory firm on the transaction, also assumed administration duties after the scheme’s existing administrator lacked the experience and capacity to prepare for a bulk‑annuity approach. It took three months to ready the scheme for the transaction.
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Implications for trustees and sponsors
For trustees and scheme sponsors, the current environment offers both opportunity and pressure. The surge in insurer capacity means that well‑prepared schemes can negotiate favorable terms, but the growing number of buy‑in requests also intensifies competition for attention. LCP’s advice stresses the importance of thorough preparation to stand out and secure strong engagement from insurers.
Industry observers note that the trend toward more automated, member‑focused services could reshape how buy‑in transactions are priced and delivered. As insurers refine their digital tools, the expectation is that the process will become more transparent and efficient for scheme trustees.
Overall, the combination of heightened competition, innovative service models, and a focus on member outcomes suggests that the buy‑in market will remain dynamic, even if annual volume records are not set in the near term.
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