The UK large annuity market is set to have its busiest year yet in 2025, according to Aon, a global professional services firm that provides advice and solutions on risk, retirement and health.
Aon attributed the high level of activity to increased competition, particularly for smaller transactions, as well as continued interest from insurers across the market. While overall sales are down compared to recent years, Aon said demand and participation remain strong.
Aon reported 367 large annuity transactions completed in 2025, surpassing previous records (293 in 2024 and 227 in 2023). However, Aon pointed out that total transaction value reached 38.2 billion pounds, down from 49.1 billion pounds in 2023 and 47.7 billion pounds in 2024. Aon also said it advised on transactions representing more than 25% of total large annuity value. Volume during the year.
Aon sees the ongoing shift towards smaller transactions as a defining feature of the market. The report highlights that 83% of all transactions in 2025 will be under £100 million, with particularly strong growth in transactions under £10 million, rising from 58 in 2023 to 119. Aon said this trend has led to a significant decline in average deal size, which has fallen by more than half in the past two years.
In its analysis, Aon highlighted that competition in the sub-£100m segment has increased significantly. According to reports, a number of insurers are currently actively quoting smaller transactions, with 10 insurers set to complete transactions under £50m in 2025, compared with eight the previous year. Meanwhile, Aon noted that eight insurers each had a business volume in excess of £1 billion, indicating that their ability to handle larger transactions remains.
Aon reported that the second half of 2025 was the most active six months on record in terms of deal volume, with 207 transactions completed and a transaction value of £28.5 billion. While this is down from the £32.6 billion recorded in the second half of 2024, Aon believes this level of activity reflects continued market momentum. It also noted that eight transactions exceeding £1 billion were completed during the year, indicating continued demand for large-scale risk transfer.
From an insurer perspective, Aon said Aviva, Just Group and Legal & General together accounted for 71% of all deals completed in 2025. Aon highlighted that Legal & General completed its biggest deal of the year, a £4.6bn acquisition, while new entrants such as Royal London and M&G continued to expand their presence and increase deal volumes.
Aon further reported that the longevity swaps market had its busiest year since 2020, with publicly announced trading volumes of £18.8 billion. This is more than in 2023 and 2024 combined, it noted. Aon acted as lead adviser on the largest longevity swap deal of the year, a £6bn deal for the BBC Pensions Scheme, and attributed growth in the sector to attractive pricing, improved accessibility for mid-sized schemes and increased demand to hedge a wider range of liabilities.
Aon also pointed to the continued development of the superfund market, with integrated vehicles becoming a more mature part of the final pipeline. While activity in 2025 is more limited than expected, Aon explained that improved funding levels have enabled some plans to move directly to acquisitions. Nonetheless, Aon expects the market to grow as regulatory clarity increases and competition from new entrants intensifies.
Looking ahead, Aon expects block annuity transaction volumes to exceed £40 billion by 2026, supported by a strong trading pipeline and continued interest from insurers. It emphasizes that a plan that is well prepared and able to act quickly will be best positioned to obtain favorable pricing in an increasingly competitive environment.
Overall, Aon’s analysis shows that the UK large annuity market remains highly active, with the structural shift towards smaller transactions and wider insurer participation continuing to influence its development.
