De-risking report 2026
With high demand persisting from UK pension schemes for risk transfer solutions, we expect 2026 to continue the momentum of record-breaking activity and innovation seen in recent years. For those seeking to de-risk pension schemes and optimise long-term value for members, this will bring both significant opportunities and fresh challenges.
With this backdrop, we share five predictions on what to expect from the risk transfer market over the next year.
We predict that total risk transferred to insurers and reinsurers will reach £70 billion in 2026, up £10 billion or 15% from the already high volumes seen in 2025.
We forecast the bulk annuity market will exceed £50 billion in 2026. Whilst we expect the number of transactions to be similar to 2025, we anticipate more larger deals completing this year, driving up volumes of risk transferred.
This continues the trend we have seen since 2023 of high demand for bulk annuities, with schemes taking advantage of favourable funding levels and attractive market pricing. We expect the market to remain highly competitive in 2026 (notwithstanding the intended combination of Blumont and Just). This competitive dynamic, combined with improved asset-sourcing abilities for a number of insurers as a result of new connections to global asset managers, is likely in our view to see strong pricing continuing in 2026.
Whilst there is a potential pricing headwind to the extent the PRA's review of the use of Funded Reinsurance reduces its use by insurers, in our opinion this will have a modest impact overall, noting that insurers using each model were successful in winning business in 2025.
We expect total longevity swap volumes to be similar to 2025, with up to £20bn of risk transfer anticipated over the coming year.
Whilst volumes will be driven by larger deals, and we expect the market to continue to be busy in this space, we predict a growth in interest from schemes of all sizes to support run-on strategies. We are launching a solution aimed at transactions of between £100m and £500m, to increase efficiency and provide access to competitive pricing at the smaller end of the market.
We predict two new entrants to the superfund market over 2026, joining Clara as an option for schemes seeking to transfer to a superfund. This additional competition, and choice, along with expected improvements in superfund pricing, will result in a doubling in the total number of deals done to date (which currently stands at four), by the year end.
We have seen a marked increase in client interest in superfunds and expect this to translate into an acceleration in deals this year. However, at least until the current gateway principles are relaxed, we still expect annual deal figures to be in the single digits and but a fraction of the numbers we see in the bulk annuity market.
With the market – on all sides – having demonstrated an ability to innovate in response to client specific needs, we predict there will be another "new" risk transfer solution implemented in 2026. Exactly what this looks like remains to be seen.
Read more about Aberdeen's pioneering transaction to assume sponsorship of the £1.2bn Stagecoach Group Pension Scheme.
The acquisitions of Just, PIC and Utmost by overseas investors are interesting, but will they substantively change the market? No, we don't think so. In practice this is a change in ownership, Just and PIC at least are maintaining their brand and management, and we don't expect much impact.
At a practical level, we think the biggest risk to the day-to-day operations of the insurers is the disruption and potential cultural shift caused by the acquisitions. However, with careful change management, we are confident this can be managed to minimise any impact.
From a trustee perspective, we would recommend understanding the financial implications of the acquisitions. In-depth insurer financial due diligence may be desirable if any of the above are being considered for a transaction, to enable trustees to get comfortable with the support offered by the new owners.
We expect our cyber risk colleagues to be busy in 2026. With developing technology, the increased use of online portals and AI becoming more mainstream, understanding cyber security is paramount. Trustees will want to ensure insurers have clear and repeatable plans to protect against, and respond to, cyber attacks.
Ensuring quality of member experience and long-term reliability of insurer administration service is increasingly paramount for trustees when selecting an insurer. Our annual research into this critical area gives trustees in-depth insights into insurer performance to support this decision making.
However, this is only half the story and as well as past performance it is important for trustees to understand how the insurer is protecting itself against key risks which could at best be disruptive, at worst financially detrimental, to policyholders.
Whilst digital innovation in the pensions industry means online portals, real-time data access and streamlined retirement processes are becoming standard expectations, with increased digitisation comes increased risk of a cyber security breach or attack. We have this year seen the start of a trend of trustees wanting a deeper understanding of the insurers' policies and protections against cyber risks and anticipate this becoming mainstream in 2026.
We predict 2026 will see insurer propositions develop to take on more of the data cleanse responsibilities from scheme administrators and an increased willingness from insurers to implement GMP equalisation on behalf of schemes or, even, undertake the calculations for GMP equalisation themselves.
The rapid growth in the bulk annuity market has resulted, for some schemes, in delays in reaching buyout, with scheme administrators stretched and insurers facing a queue of schemes seeking to finalise data cleansing and move to buyout.
On the plus side, the typical scheme approaching the market for a buy-in in 2026 will be better prepared than many of those who transacted before, with stability in funding levels giving trustees the confidence to spend more time getting transaction ready. This includes an increasing proportion of schemes who will have already completed GMP equalisation, a significant project which has, to date, been mainly tackled post buy-in.
For schemes for whom speed of buyout is a priority, we have started to see solutions being proposed by insurers to help accelerate timescales. And with more schemes in surplus, trustees may be willing to spend part of this excess on increasing the confidence associated with the journey to buyout.
The risk transfer market is poised for another year of dynamic growth and innovation over 2026. This will present significant opportunities for trustees and sponsors to achieve their de-risking objectives and optimise outcomes for members.
Such opportunities must be weighed up against the associated risk – in terms of financial security and member outcomes. In this context, member focus and risk management will remain paramount to trustees who will look for providers to demonstrate a "member-first" outlook and evidence strong risk policies in areas such as cyber where the headlines have demonstrated there is no cloak of invisibility for any given sector or business.
All said, we expect 2026 to be another busy year, building on 2025. If you would like to talk to us about your scheme, please reach out to any of the team – we'd be delighted to chat!
