UK pensions, actuarial and investment advisory firm Lane Clark & Peacock (LCP) reports that intense competition among insurers has driven buy-in pricing for UK defined benefit pension schemes to record levels, according to its latest pensions risk transfer market update.
LCP attributed this development to insurers’ capacity remaining at historically high levels, currently exceeding short-term demand, and to the expanding role of new entrants to the market. The consultancy said the combination increased competition for both small and large deals, providing more favorable pricing outcomes for pension schemes.
LCP’s analysis shows buy pricing reaches its most competitive point in the first quarter of 2026, as shown in a chart comparing its pricing to gilt yields. The company added that despite recent market volatility related to the conflict in the Middle East, pricing is generally resilient and the scenario remains attractive through the second quarter of 2026. The consulting firm noted that many of its clients have received pricing improvements relative to the first quarter of 2026.
According to LCP, total UK buying volume will reach 38.2 billion pounds in 2025. Looking ahead, activity in 2026 will depend in part on whether several large £1bn-plus deals are completed this year or delayed until next year. LCP expects trading volumes to continue to be strong this year and, although not a record year, insurers’ capacity may still be sufficient to meet demand and maintain competitive pressure during this period.
LCP also highlights the growing influence of new market players. Royal London, Prudential and Utmost have strengthened their positions, with LCP noting that their combined share rose to 9% of trading volume in 2025, compared with 3% in 2024. Together with Blumont, they completed 46 deals worth £3.4bn in 2025, up from nine deals worth £1.5bn a year earlier. LCP said this accounted for more than half of the overall increase in the number of transactions, which increased by 23% from 298 to 367 transactions.
The consultancy added that pension schemes are increasingly weighing pricing and non-price factors, with member experience becoming a key differentiator between insurers. LCP uses the example of the Rolls-Royce deal, where member outcomes are at the heart of the deal structure. It also noted that insurers are investing in digital tools such as online benefit models and a more streamlined retirement journey, while automation and improved operating models help speed up quoting and reduce operational bottlenecks.
LCP reports that smaller schemes, particularly those under £100m, are benefiting most from current market conditions. Their deal share in volume terms rose to 83% in 2025 from 54% five years ago. The consultancy attributes this to broader insurer participation and the declining dominance of larger deals, adding that all insurers are now active in deals below £100m, supported by more efficient quoting processes and expanded capacity.
Charlie Finch, partner at LCP, commented: “In the two decades since the first buy-in, competition and choice in the UK pension risk transfer market have reached record levels. Strong insurer capabilities and fierce competition have pushed the attractiveness of buy-in pricing for LCP clients to unprecedented levels in early 2026.
“For well-prepared plans, the current market offers compelling pricing opportunities and provides members with leverage to negotiate customized terms.”
LCP partner Ruth Ward added: “Competition is no longer limited to the largest deals, with smaller schemes benefiting from a wider range of insurers actively participating in the space and improving market access. This creates real opportunities for trustees and sponsors.”
“While market conditions are favorable, it is important not to lose sight of the fact that hundreds of schemes are seeking buy-in offers. Therefore, high-quality preparation is critical to stand out, achieve strong participation from insurers and ensure an efficient post-deal process.”
