Lane Clark & Peacock (LCP), a UK pensions, actuarial and investment advisory consultancy, has reported that strong competition among insurers has driven UK defined benefit pension scheme buy-in pricing to record levels, according to its latest pension risk transfer market update.
LCP attributes the development to insurer capacity remaining at historically high levels, currently outstripping short-term demand, alongside the expanding role of newer entrants to the market. The consultancy says this combination has intensified competition across both small and large transactions, supporting more favourable pricing outcomes for pension schemes.
LCP’s analysis shows that buy-in pricing reached its most competitive point in Q1 2026, as illustrated in its chart comparing pricing with gilt yields. It adds that pricing has been broadly resilient despite recent market volatility linked to the conflict in the Middle East, with conditions remaining attractive into Q2 2026. The consultancy notes that a number of its clients have secured pricing improvements relative to Q1 2026.
According to LCP, total UK buy-in volumes reached £38.2bn in 2025. Looking ahead, it says 2026 activity will depend partly on whether several large transactions above £1bn complete this year or are delayed into next year. LCP expects another year of strong deal flow, though not a record year, with insurer capacity likely to remain sufficient to meet demand and sustain competitive pressure throughout the period.
LCP also highlights the increasing influence of newer market participants. Royal London, Prudential and Utmost have strengthened their positions, with LCP noting their combined share rising to 9% of 2025 volumes, compared with 3% in 2024. Alongside Blumont, they completed £3.4bn across 46 transactions in 2025, up from £1.5bn across nine transactions a year earlier. LCP says this contributed to more than half of the overall increase in transaction numbers, which rose by 23% from 298 to 367.
The consultancy adds that pension schemes are increasingly weighing non-price considerations alongside pricing, with member experience becoming a key differentiator between insurers. LCP points to the Rolls Royce transaction as an example where member outcomes were central to the deal structure. It also notes that insurers are investing in digital tools such as online benefit modelling and more streamlined retirement journeys, while automation and improved operating models are helping to speed up quotations and reduce operational bottlenecks.
LCP reports that smaller schemes, particularly those below £100m, are benefiting most from current market conditions. Their share of transactions by number rose to 83% in 2025 from 54% five years earlier. The consultancy attributes this to wider insurer participation and reduced dominance from larger deals, adding that all insurers are now active in sub-£100m transactions, supported by more efficient quotation processes and expanded capacity.
Charlie Finch, Partner at LCP, commented: “Twenty years on from the first buy-in, the UK pension risk transfer market is seeing record levels of competition and choice. Strong insurer capacity and heightened competition have driven the attractiveness of buy-in pricing for LCP clients to unprecedented levels in early 2026.
“For well-prepared schemes, the current market presents a compelling pricing opportunity and gives leverage to negotiate bespoke terms for the benefit of members.”
Ruth Ward, Partner at LCP, added: “Competition is no longer limited to the largest transactions, with smaller schemes benefiting from a wider range of insurers actively participating in this segment and improved access to the market. For trustees and sponsors, that creates a real opportunity.
“Whilst market conditions are favourable, it’s important not to lose sight of the fact that hundreds of schemes are now seeking buy-in quotations. Good quality preparation is therefore critical to stand out from the crowd, achieve strong insurer engagement and ensure efficient post-transaction processes.”
