Aon plc, a professional services firm providing risk, retirement and health solutions, has reported that activity in the UK pension risk settlement market is expected to increase significantly following a relatively subdued start to 2026.
Aon attributes the anticipated growth to strong scheme funding positions, competitive insurer pricing and a wider range of options for trustees and sponsors planning their long-term pension strategies.
Martin Bird, Senior Partner and UK Head of Risk Settlement at Aon, said: “After a relatively subdued start to 2026, activity levels in the UK pension risk settlement market are again starting to surge. We are seeing a significant pipeline of transactions building across the market, including several very large schemes. We expect to see high transaction volumes up to the year-end and then on into 2027.
“As ever, the market is also changing. With funding positions remaining strong and insurer pricing highly attractive, trustees and sponsors are taking a very considered approach to their endgame strategies and we are seeing ‘surplus deals’ being struck that enable trustees to lock in favourable balance sheet positions and secure member benefits.
“For many schemes now, the decision is no longer simply whether to run on or buy out. Instead, trustees are increasingly viewing run-on as a transitional stage on the path to an eventual buyout. This way they can use the additional time to build further resilience, improve member outcomes and maximise value. In effect, we are seeing a more controlled ‘run-in’ strategy starting to emerge.”
John Baines, Senior Partner at Aon, commented: “The exceptionally attractive pricing available from insurers remains the most significant driver of activity at the moment. Pricing has improved significantly over the last 12 months, supported by strong competition and insurers’ growing access to sources of external capital. With insurers actively seeking new business, many pension schemes are now able to consider opportunities that previously appeared out of reach.
“At the same time, the range of endgame options available to trustees continues to expand. Alongside traditional bulk annuities, schemes can now consider a broader set of solutions, including superfund transfers and capital-backed run-on models – all allowing them to pursue a strategy that is more closely in line with their objectives and circumstances. The bonus is that insurers are innovating to stay ahead of alternative competition – and that’s creating even more value for members and sponsors.”
Baines further added “While the increasing number of options is undoubtedly positive for schemes, it also makes decision-making more complex. Trustees must now evaluate a wider range of options, risks and trade-offs than ever before. The key challenge is ensuring they have the right information, advice and governance framework in place to make those decisions with confidence.”
