MARCH 2026
Key risks The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested. Important information The views expressed in this document are those of Legal & General Investment Management Limited and/or its affiliates (“LGIM”- or “L&G”, “we” or “us”) as at the date of publication. This document is for information purposes only and we are not soliciting any action based on it. The information above discusses general economic, market or political issues and/or industry or sector trends. It does not constitute research or investment, legal or tax advice. It is not an offer or recommendation or advertisement to buy or sell securities or pursue a particular investment strategy. Past performance should not be taken as an indication or guarantee of future performance and no representation, express or implied, is made regarding future performance. This document may not be reproduced in whole or in part or distributed to third parties without our prior written permission. Not for distribution to any person resident in any jurisdiction where such distribution would be contrary to local law or regulation. © 2026 Legal & General Investment Management Limited, authorised and regulated by the Financial Conduct Authority, No. 119272. Registered in England and Wales No. 02091894 with registered office at One Coleman Street, London, EC2R 5AA.
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Putting theory into practice
PRT Monitor
Endgame Insights
Funding levels
DB landscape
Buyout
Run-on
For professional investors only. Capital at risk.
In this latest edition of Endgame Insights, we showcase the latest combined thinking from our Asset Management and Pension Risk Transfer (PRT) businesses. This report aims to provide a comprehensive overview of the latest market conditions and evolving solutions-focus for Defined Benefit (DB) pension schemes approaching their endgame. Together with the Pensions Management Institute (PMI), we have surveyed a range of trustee members of the PMI to seek their views on evolving endgame themes. The survey highlights high funding levels, interest in buyout, run-on or both, and a focus on surplus extraction. We cover these themes further in this report.
Global PRT Monitor
UK View
Rest of the World
Investment Outlook
Surplus extraction
Trustee survey snapshot
Discover more
The Pensions Management Institute (PMI) was commissioned by L&G to conduct the survey. As part of this report, PMI and L&G jointly developed and approved all questions included in the survey and managing the data collection process, while L&G provided the survey link to potential participants. They received 76 responses. All responses to the survey were anonymised. The survey accepted responses between 20 October 2025 and January 28 2026. [1] Survey respondents were asked: ‘Are you minded to pursue one or more buy-ins but not a full buyout?’ 43% responded ‘no’, 15% responded ‘run-on’ and 42% responded ‘yes’. If schemes are considering buy-ins but not buyout, they are likely to be considering a combination of run-on and PRT; if they are not considering buy-ins but are also not looking to run on, they are likely to be targeting buyout.
Significant cohort of schemes pursuing each endgame option1
57% of respondents considering surplus extraction
Almost half of schemes are fully funded on a buyout basis
USA view
Endgame Insights webinar
Lara Edmonstone-West, Mathew Webb and Rosie Twist discuss the key findings from our trustee survey and preview this Endgame Insights report.
Lara Edmonstone-West, Mat Webb and Rosie Twist discuss the key findings from our trustee survey and preview this Endgame Insights report.
The UK’s DB landscape is entering a new phase of maturity. Over the past year, trustees and corporate sponsors have been navigating one of the most significant shifts in endgame planning for decades, shaped by stronger scheme funding levels, regulatory reform and a widening set of strategic options. Much of this momentum has been driven by the publication of the draft Pension Schemes Bill, which has acted as a catalyst for industry wide discussion – from the merits of run-on versus buyout (or indeed run on until buyout), to the future treatment of scheme surplus, and the evolving role of superfunds which will move to a permanent legislative regime under the Pension Schemes Bill with the aim of “consolidating DB schemes that cannot reach buy-out, providing greater security to members and supporting economic growth”. The signing of the Mansion House Accord has added further impetus, signalling renewed focus on UK investment and long-term value creation across the pensions system. Meanwhile, in its guidance note “New models and options in defined benefit pensions schemes”, The Pensions Regulator has issued a call to action that “Schemes should have documented policies regarding their long-term objectives and endgame options, including surplus”.
In this latest edition of Endgame Insights, we showcase the latest combined thinking from our Asset Management and Pension Risk Transfer (PRT) businesses. This report aims to provide a comprehensive overview of the latest market conditions and evolving solutions-focus for DB pension schemes approaching their endgame. Together with the Pensions Management Institute (PMI), we have surveyed a range of trustee members of the PMI to seek their views on evolving endgame themes. The survey highlights high funding levels, interest in buyout, run-on or both, and a focus on surplus extraction. We cover these themes further in this report.
The UK’s defined benefit (DB) landscape is entering a new phase of maturity. Over the past year, trustees and corporate sponsors have been navigating one of the most significant shifts in endgame planning for decades, shaped by stronger scheme funding levels, regulatory reform and a widening set of strategic options. Much of this momentum has been driven by the publication of the draft Pension Schemes Bill, which has acted as a catalyst for industry wide discussion – from the merits of run on versus buyout (or indeed run on until buyout), to the future treatment of scheme surplus, and the evolving role of superfunds which will move to a permanent legislative regime under the Pension Schemes Bill with the aim of “consolidating DB schemes that cannot reach buy-out, providing greater security to members and supporting economic growth”. The signing of the Mansion House Accord has added further impetus, signalling renewed focus on UK investment and long term value creation across the pensions system. Meanwhile, in its guidance note “New models and options in defined benefit pensions schemes”, The Pensions Regulator has issued a call to action that “Schemes should have documented policies regarding their long-term objectives and endgame options, including surplus”.
US View
Source: LIMRA Secure Retirement Institute Group Annuity Transfer Survey. 2025 figure based on Legal & General Retirement America’s estimation.
Market Outlook As is typical in the second half of the year, we expect US PRT activity to pick up through the rest of 2025, with a few more large transactions coming to market. These jumbo transactions will significantly impact the total premium volume, which we are currently estimating to be between $35 and $45 billion. In February, we announced the creation of a long-term strategic partnership with Meiji Yasuda, a market leading Japanese mutual life insurance company. This partnership will allow us to drive growth in the US PRT business, while Meiji Yasuda will expand its established partnership with L&G in asset management by outsourcing the investment management of US PRT and protection assets to L&G. In addition, we announced a long-term partnership with Blackstone in July. Through this partnership, we’ll gain access to a broader range of high-quality investments, predominantly in the US, using Blackstone’s private credit platform. We plan to invest up to 10% of our new annuity business through this collaboration. Together, we’ll also develop new investment products that combine public and private credit, helping us reach more global wealth and wholesale markets.
Endgame options at a glance
1. https://www.limra.com/en/newsroom/news-releases/2025/limra-u.s.-single-premium-pension-risk-transfer-sales-leap-14-to-$51.8-billion-in-2024 2. https://www.limra.com/en/newsroom/news-releases/2025/limra-first-quarter-u.s.-pension-risk-transfer-sales-top-$7-billion/ 3. https://www.limra.com/en/newsroom/news-releases/2024/limra-u.s.-pension-risk-transfer-sales-post-record-high-first-quarter/ 4. https://www.limra.com/en/newsroom/news-releases/2024/limra-u.s.-pension-risk-transfer-sales-jump-14-in-first-half-of-2024 5. https://www.limra.com/siteassets/newsroom/fact-tank/sales-data/2025/1q/u.s.-group-annuity-risk-transfer-activity--buy-out-sales-2025-first-quarter.pdf
This year’s Endgame Insights report examines what these developments mean in practice for DB schemes. Drawing on joint research with the Pension Management Institute (PMI), alongside insights from our Asset Management and Pension Risk Transfer (PRT) businesses, we explore how trustees are reshaping their long term strategies and the practical steps schemes are taking as they approach endgame readiness. Our aim is to provide clear, actionable guidance for trustees, grounded in what we are seeing every day across our client base. The PMI survey results underline just how quickly the landscape is shifting. Almost half of schemes surveyed (49%) are now fully funded on a buyout basis, placing endgame planning firmly at the top of the agenda. These strong funding levels, combined with regulatory steps to make surplus extraction more accessible, are bringing to life the trend we highlighted in our last report: the emergence of three primary endgame routes – buyout, run on, or a combination of both. While a clear majority of schemes expect insurance to play a central role in their de risking journey, a meaningful proportion are planning to run on, whether as a long term strategy or for a period before securing their members’ benefits with an insurer. Reflecting this shift, 57% of schemes surveyed are now actively considering surplus extraction – whether during run on, at the point of buyout, or in the years leading up to it. What is clear is that schemes now have more choice than ever. Our role at L&G is to support trustees whichever route they choose and move through their endgame journey with confidence.
“Schemes should have documented policies regarding their long-term objectives and endgame options, including surplus”
Buyout Schemes wishing to ‘lock in’ their strong funding positions by progressing towards buyout with an insurer to ensure full security of their pension scheme and its members. Settling the contractual benefits can allow well-funded schemes to crystallise and realise a surplus . The goal with buyout is to guarantee the security of members' pensions, irrespective of market volatility, and remove future scheme running expenses. Click here to learn more.
Run-on Some trustees may want to ‘run on’ their scheme in perpetuity i.e. remain invested and focussed on paying pensions until the final member benefit is paid. These schemes may be seeking to generate further surplus and to extract surplus that could be returned to the sponsoring company and potentially used to offer additional discretionary benefits to DB members, or to fund the company’s defined contribution (DC) pension scheme. Click here to learn more.
Both Pension scheme funding levels remain exceptionally healthy. A significant group of schemes are keen to stay invested for now and potentially target surplus extraction, while keeping the ultimate security of buyout in mind over a longer-term horizon. These schemes are seeking to have the ‘best of both’ endgame destinations.
Offering you the combined expertise of a UK market leader1. Whatever your scheme’s preferred endgame, please don’t hesitate to contact us if you have any questions or would like to hear more about how L&G can support you.
To discover more about investing for run-on, read our latest article.
Discover more in our Endgame Insights webinar
The UK’s DB landscape is entering a new phase of maturity. Over the past year, trustees and corporate sponsors have been navigating one of the most significant shifts in endgame planning for decades, shaped by stronger scheme funding levels, regulatory reform and a widening set of strategic options. Much of this momentum has been driven by the publication of the draft Pension Schemes Bill, which has acted as a catalyst for industry wide discussion – from the merits of run-on versus buyout (or indeed run-on until buyout), to the future treatment of scheme surplus, and the evolving role of superfunds which will move to a permanent legislative regime under the Pension Schemes Bill with the aim of “consolidating DB schemes that cannot reach buy-out, providing greater security to members and supporting economic growth”. The signing of the Mansion House Accord has added further impetus, signalling renewed focus on UK investment and long-term value creation across the pensions system. Meanwhile, in its guidance note “New models and options in defined benefit pensions schemes”, The Pensions Regulator has issued a call to action that “Schemes should have documented policies regarding their long-term objectives and endgame options, including surplus”.
This year’s Endgame Insights report examines what these developments mean in practice for DB schemes. Drawing on joint research with the PMI, alongside insights from our Asset Management and PRT businesses, we explore how trustees are reshaping their long-term strategies and the practical steps schemes are taking as they approach endgame readiness. Our aim is to provide clear, actionable guidance for trustees, grounded in what we are seeing every day across our client base. The PMI survey results underline just how quickly the landscape is shifting. Almost half of schemes surveyed (49%) are now fully funded on a buyout basis, placing endgame planning firmly at the top of the agenda. These strong funding levels, combined with regulatory steps to make surplus extraction more accessible, are bringing to life the trend we highlighted in our last report: the emergence of three primary endgame routes – buyout, run-on, or a combination of both. While a clear majority of schemes expect insurance to play a central role in their de risking journey, a meaningful proportion are planning to run on, whether as a long term strategy or for a period before securing their members’ benefits with an insurer. Reflecting this shift, 57% of schemes surveyed are now actively considering surplus extraction – whether during run-on, at the point of buyout, or in the years leading up to it. What is clear is that schemes now have more choice than ever. Our role at L&G is to support trustees whichever route they choose and move through their endgame journey with confidence.
Funding Levels
Surplus Extraction
This year’s Endgame Insights report examines what these developments mean in practice for DB schemes. Drawing on joint research with the PMI, alongside insights from our Asset Management and PRT businesses, we explore how trustees are reshaping their long-term strategies and the practical steps schemes are taking as they approach endgame readiness. Our aim is to provide clear, actionable guidance for trustees, grounded in what we are seeing every day across our client base. The PMI survey results underline just how quickly the landscape is shifting. Almost half of schemes surveyed (49%) are now fully funded on a buyout basis, placing endgame planning firmly at the top of the agenda. These strong funding levels, combined with regulatory steps to make surplus extraction more accessible, are bringing to life the trend we highlighted in our last report: the emergence of three primary endgame routes – buyout, run-on, or a combination of both. While a clear majority of schemes expect insurance to play a central role in their de-risking journey, a meaningful proportion are planning to run on, whether as a long-term strategy or for a period before securing their members’ benefits with an insurer. Reflecting this shift, 57% of schemes surveyed are now actively considering surplus extraction – whether during run-on, at the point of buyout, or in the years leading up to it. What is clear is that schemes now have more choice than ever. Our role at L&G is to support trustees whichever route they choose and help them move through their endgame journey with confidence.
Buyout Schemes wishing to ‘lock in’ their strong funding positions by progressing towards buyout with an insurer to ensure full security of their pension scheme and its members. Settling the contractual benefits can allow well-funded schemes to crystallise and realise a surplus. The goal with buyout is to guarantee the security of members' pensions, irrespective of market volatility, and remove future scheme running expenses. Click here to learn more.
Source: IPE Research 2024.
For more detail on investment strategies and endgame options please read our article below.
Read article here
Source IPE Research 2023.
Article 1 standfirst goes here
DB scheme funding levels
According to the Purple Book 2025, just over a third of DB pension schemes by number are above 100% funding on a buyout basis.
Rising funding levels DB schemes have been on a long-term journey towards full funding, with sponsoring companies contributing hundreds of billions of pounds to repair pension scheme deficits across the past two decades. Having spent many years seeking to improve funding levels, the surge in bond yields since 2022 has accelerated this progress as liability values have fallen more than asset values. As at 31 March 2025, the PPF estimates that total DB assets were c.£1.1 trillion and over a third of schemes (by number) and approximately half of schemes (by assets) were in surplus on a buyout basis. This backdrop has led to what we believe to be a time for opportunity and innovation for DB schemes, as we’ve detailed further in our latest in-depth outlook. The chart below shows the evolution of the total value of DB assets compared to the total cost of UK DB schemes entering the Pension Protection Fund (total PPF liabilities) and the estimated total cost of all UK DB schemes insuring liabilities. This has meant that many schemes find themselves better funded than ever before, as indicated by the yellow dots on the chart showing increasing funding levels on a buyout basis at each successive annual edition of the PPF Purple Book. Consequently, the average DB scheme now holds assets that could already be sufficient to meet their long-term liabilities, of paying all members’ pensions in full as they fall due.
Source: The Purple Book 2025, L&G analysis at 31 March 2025.
For schemes that are still on their journey towards endgame affordability, or any schemes looking to meet their risk management and cashflow needs, a range of liability-driven investment (LDI) and cashflow-driven investment (CDI) solutions are available.
Buy-ins and buyouts above £1bn in 2024
Distribution of buyout funding levels
UK view
US view
Rest of the world
Investment outlook
UK PRT market sees record transaction numbers Total UK transaction volumes amounted to £47.8 billion in 2024 – the second-largest year ever – with a record 299 buy-in and buyout transactions completed. For the first time, six insurers each wrote volumes of more than £5 billion. This is a great example of the healthy competition that exists in the UK market and the variety of options currently available to pension plan trustees. Buy-in and buyout activity continues apace in 2025 with robust activity across all segments of the market. We announced in our half year results for 2025 that we have written or are in exclusive negotiations on £5.2bn of global PRT in the year to date. Growth across the whole market The last few years have been particularly notable not just for the increase in annual volumes, but the significant increase in the number of transactions completed each year. Data from Hymans Robertson shows that transactions involving plans under £100 million made up almost 80% of all transactions in 2024. Insurers have innovated to deliver streamlined solutions for smaller plans, including L&G’s own Flow proposition, which supports plans on a collaborative journey all the way through to buyout. At the larger end of the market a record 14 buy-ins of over £1 billion were completed last year. Today this is seen as business as usual, but prior to 2015, the UK market had completed just seven transactions of over £1 billion in its entire history.
UK Defined Benefit schemes total funding level
Source: The Purple Book 2025, PPF7800 Index as at 31 December 2025. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested. Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
Distribution of buyout funding levels According to the Purple Book 2025, just over a third of DB pension schemes by number are above 100% funding on a buyout basis. By translating this information by number to the total scheme assets reported, as shown in the chart below, this corresponds to an estimated c.£356bn of assets. This brings to life the potential immediate demand for buyout, from UK DB schemes. However, some schemes in this fully funded group may still opt to run on, either long-term, or for a period before buying out. In either a buyout or run-on context, schemes may also consider the potential to extract a surplus.
Distribution of Buyout funding levels
Source: LCP as at September 2025. Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
UK PRT market volumes and outlook The UK PRT market has delivered a record number of transactions once more, with insurers securing around £40 billion of members’ benefits in 2025. Based on our pipeline, we anticipate that total market volumes in 2026 are likely to be between £40-50 billion. With more than 350 transactions completing across the market in 2025, pension schemes of all sizes have been able to secure their members' benefits for the long-term, underpinned by the security of the UK's insurance regime. L&G completed three of the five largest transactions of 2025, including a £1.6 billion buy‑in with the BP Pension Fund and a £4.6 billion buy‑in with pension schemes sponsored by Ford Motor Company Limited – the largest UK PRT transaction of the year. Other large transactions announced in 2025 included those for schemes sponsored by Rolls‑Royce, MMC UK and National Grid.
Forecast UK PRT volumes
Another characteristic of the Canadian market that is common in the UK and US is that market activity tends to skew significantly towards the second half of the year, as major transactions and increased transaction volumes are typically completed towards the year’s end.
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Since our previous edition of Endgame Insights, we have seen a wider mix of insurers enter the PRT market, providing increased choice to trustees and sponsors. Recent activity – such as Athora, Brookfield, and JAB Insurance announcing plans to acquire Pension Insurance Corporation (PIC), Just Group and Utmost respectively – highlights the growing interest in the market from investors. We view these developments as a strong endorsement of the PRT market and a clear signal of the sector’s continued momentum. At the same time, we have announced long-term strategic partnerships with Meiji Yasuda and Blackstone to support our international growth ambitions and further strengthen our position in the UK PRT market. Our partnership with Blackstone* seeks to enhance our ability to source high quality assets in the US – which we believe in turn supports our pricing and the the pensions we insure. What is important beyond price? In today’s market, non-pricing factors – especially the quality of member experience – are becoming increasingly important in insurer selection decisions. At L&G, delivering excellent member care is fundamental to our ethos, and this aligns with the growing focus trustees are placing on this area. In a competitive environment, insurers are seeking to differentiate themselves through enhanced service offerings, including clearer communications, personalised support, improved digital tools, and smoother transitions from scheme administration to insurer administration; features that help ensure members continue to feel supported throughout and after the transaction. Across the market there is an increasing focus on operational efficiency: in the PMI survey, 34% of respondents who had already completed a buy‑in said they expect to move to buyout within the next two years, with a further 41% planning to do so within three to five years – meaning around 75% anticipate completing their buyout transition within the next five years.
With nearly 40 years at the forefront of the PRT market, we are proud to guide you through the dynamics driving this demand and the trends to look out for in the year ahead. Pricing and partnerships underscore market momentum Buy-in pricing has continued to be highly attractive, driven by strong insurer appetite and growing market capacity. The chart below shows buy-in pricing expressed as a return relative to the yield on gilts in blue (scale on right hand side) and the yield on corporate bonds relative to gilts in red (scale on left hand side). The higher the blue line, the more attractive the pricing for a pension scheme relative to holding a portfolio of gilts to back the liabilities.
Source: XPS Group, Bulk Annuity Market Tracker. Figure for 2025 is an estimate subject to the publication of all insurers’ full year disclosures.
Total number of PRT transactions each year
Pricing chart - Implied return on buy-in relative to gilts
For schemes that have completed a buy-in, 75% expect to reach buyout within 5 years
The PMI survey also explored trustees’ priorities beyond price, highlighting the importance of insurer financial strength, a high‑quality member experience and the credibility of a recognised brand with a strong track record in the market. As part of assessing long-term security, trustees are also paying closer attention to insurers’ sustainability credentials. While all these elements remain core to trustees’ fiduciary duty, member experience has risen sharply in prominence, with the chart reflecting the increasing spotlight on service quality.
A vibrant market for smaller pension schemes The record number of transactions completed each year is being driven largely by schemes with assets of under £100 million. Data from the PMI survey shows that 84% of respondents do not believe that being a smaller scheme would inhibit their ability to transact, reflecting the strength and vitality of this part of the market.
Insurers have innovated to deliver streamlined solutions for smaller pension schemes, including L&G Flow, which provides price certainty, first‑class member care and seamless integration with our asset management capabilities. As highlighted in the survey findings referenced earlier, schemes are increasingly prioritising the transition from buy‑in to buyout. Flow supports this shift by providing dedicated post‑sale support, tailored onboarding and streamlined processes, helping to reduce complexity and guide schemes on a smooth and collaborative journey through to buyout. Since we launched Flow in 2023, we have secured over £1 billion of liabilities, insuring the benefits of more than 10,000 members. Navigating an expanding set of endgame decisions The endgame landscape for DB schemes continues to broaden. Regulatory developments, including expected changes that could make superfund transfers more accessible, are increasing the range of options available to schemes. While additional choice is positive, it also places greater emphasis on understanding the security, risk, and governance differences between models such as run-on, superfunds, and buyout. Insurers are governed by a highly resilient regulatory framework, with tightly matched assets, stringent Solvency UK capital requirements, and close oversight from the Bank of England’s Prudential Regulation Authority – providing robust insurance against severe and unexpected events. By comparison, the rules that govern run-on strategies and superfunds provide scope for more investment risk to be taken and offer more limited insurance should adverse outcomes arise, with members ultimately reliant on the Pension Protection Fund if funding deteriorates and cannot be recovered. Against this backdrop, trustees will want to consider how each option balances investment risk, long-term security, and member outcomes when determining the most suitable path for their scheme. For pension schemes aiming to secure their members’ benefits with an insurer, thorough preparation is hugely beneficial. Schemes that can demonstrate clear affordability, well-specified and legally reviewed benefits, assets aligned with the types of investments insurers typically hold, and reliable, up to date member data will be ideally positioned when they approach the market. Robust governance and early, proactive engagement also help give insurers confidence in a scheme’s readiness, placing the scheme in the strongest position to achieve the best outcome for their members. Innovation in action Looking ahead, we see significant momentum in the development of insurer propositions driven by client needs. Innovation is increasingly shaped by feedback from trustees and their advisers, leading to solutions that improve execution certainty and elevate the member experience. Every pension scheme is unique, and at L&G we harness the breadth and depth of knowledge across our Group to unlock tailored solutions both pre and post transaction. For example, our price lock solution is designed to provide greaterprice certainty while terms are finalised, enabling schemes to transact across varying market environments. Our asset novation solution allows clients to transfer assets in lieu of premium payments seamlessly. This process is designed to help both market risk and the transaction fees payable by our clients. We also offer a leading range of illiquid asset solutions, as well as deferred premium options. In one transaction last year, we delivered a solution that allowed the scheme to continue using its own digital platform during buy‑in, helping to maintain a familiar and seamless member experience. In another, we worked with a specialist data provider to design a customised data‑cleansing process that delivered a smoother, more efficient journey and strengthened data accuracy ahead of buyout. The PRT market’s economic role Bulk annuity providers are not only insuring the retirement income of millions of members, but are also acting as major, long‑term investors in the real economy. Insurers are directing substantial and growing volumes of capital into UK infrastructure and productive finance – investments that help modernise national assets, stimulate job creation, and enhance regional prosperity. These commitments are being embedded into long‑term business strategies, with insurers planning to deploy several more billions in the years ahead. For example, in October we announced a £2 billion investment commitment, targeted at housing, infrastructure and urban regeneration, to accelerate regional growth across the UK. For trustees and sponsors evaluating endgame options, this reinforces the strength and resilience of the sector and its alignment with broader national priorities. Our Blueprint for Growth report, developed with Oxford Economics, shows how targeted policy reforms could unlock up to £220 billion of additional UK investment over the next decade, adding a permanent 0.7% boost to GDP by 2035. Through this research, we highlight how long‑term savings and insurance capital can be mobilised to support a more competitive, resilient and prosperous UK economy, reinforcing the vital role that the PRT sector and institutional investors already play.
Outside of pricing rank these factors in order of importance
84% of respondents do not believe their size would inhibit their ability to transact
January 2025 £1.4bn buy-in with the Sanofi Pension Scheme
March 2025 £505m buy-in with the Inchcape Motors Pension Scheme
July 2025 £800m buy-in with the Honda Group – UK Pension Scheme
October 2025 £4.6bn buy-in with Ford pension schemes
February 2025 £370m buy-in with the TUI Group UK Pension Trust
March 2025 £785m buy-in with three pension schemes sponsored by Anglo American
September 2025 £1.6bn buy-in with the BP Pension Fund
December 2025 L&G Flow surpasses £1bn milestone
Data requested
For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an L&G portfolio. The above information does not constitute a recommendation to buy or sell any security.
Source: LCP pension risk transfer report (November 2025) and Bloomberg. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested.
PMI survey commissioned by L&G, 20 October 2025 - January 28 2026.
PMI survey commissioned by L&G, 20 October 2025 - January 28 2026. Weighted rankings were calculated by assigning 4 points to each respondent’s first choice, 3 points to their second choice, 2 points to their third choice, and 1 point to their fourth choice. The chart displays the total score for each category.
Member experience At L&G, our in-house model means we can support pension schemes and their members at every step of the buyout process. First class client and customer service are core to our strategy, and this model enables us to deliver a joined up experience throughout. We have the largest and most experienced in-house team at a UK PRT insurer. With UK offices and direct dial phone numbers, we make it easy to speak to real people. Clients and members alike benefit from a culture built on expertise, empathy and human connection – creating experiences that feel personal. We’re proud that our commitment to delivering world class customer service has once again been recognised through our retention of the Customer Contact Association’s (CCA) Global Standard Accreditation for the eighth year running. In 2025 we received four awards at the CCA Global Excellence Awards, including being named the Customer Service Team of the Year – a reflection of the dedication and care our teams bring to every interaction. We welcomed more than 3,000 visitors to our customer lounge at BBC Gardeners’ World Live 2025 – our sixth year at the event – and over the past year we’ve met more customers face to face than ever before. Our customer roadshows across the UK enable meaningful conversations with members, and these engagements play an important role in how we continue to deliver high quality service, giving us valuable opportunities to listen directly to customers and ensure they remain at the heart of what we do.
Discover more about our member experience
Source: LCP as at September 2025, L&G estimate for 2025, baseline indications are L&G estimates.
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Digital services We’re proud of the excellent customer service reputation we’ve built, but we also recognise that member needs continue to evolve, and we’re committed to evolving with them. That’s why we have launched a multi year, multi-million-pound programme focused on strengthening both our service proposition and the technology behind it. Over the next two years, we are significantly enhancing our online capabilities to create a more intuitive, supportive experience for members and to increase our capacity for the future. By the end of 2027, schemes that have completed their data cleanse will benefit from a new online portal offering illustrative member quotations, virtual chat support, educational resources, and secure self-service functionality. We’ve already begun rolling this out to pilot schemes and will continue expanding through 2026 and beyond.
Discover more about our digital services
update chart
A selection of recent L&G transactions
Traditionally, buy‑in pricing has been driven by the yields insurers can generate on their underlying investments. Portfolios have typically consisted of corporate bonds and long‑term illiquid assets, with smaller gilt allocations for hedging. Pricing was therefore closely linked to credit spreads, with spikes – such as at the start of Covid – creating short‑lived periods of very strong pricing. More recently, credit spreads have reduced while pricing has remained consistently attractive. This shift reflects a more fundamental change: insurers have expanded capacity by growing teams, investing in systems, and broadening into new asset classes, supported by strong balance sheets and new capital. With more capital than ever, insurers can now support over £60bn of annual volumes. This supply‑side expansion has made pricing extremely competitive. Since our previous edition of Endgame Insights, we have seen a wider mix of insurers enter the PRT market, providing increased choice to trustees and sponsors. Recent activity – such as Athora, Brookfield, and JAB Insurance announcing plans to acquire Pension Insurance Corporation (PIC), Just Group and Utmost respectively – highlights the growing interest in the market from investors. We view these developments as a strong endorsement of the PRT market and a clear signal of the sector’s continued momentum. At the same time, we have announced long-term strategic partnerships with Meiji Yasuda and Blackstone to support our international growth ambitions and further strengthen our position in the UK PRT market. Our partnership with Blackstone seeks to enhance our ability to source high quality assets in the US – which in turn supports our pricing and the pensions we insure. What is important beyond price? In today’s market, non-pricing factors – especially the quality of member experience – are becoming increasingly important in insurer selection decisions. At L&G, delivering excellent member care is fundamental to our ethos, and this aligns with the growing focus trustees are placing on this area. In a competitive environment, insurers are seeking to differentiate themselves through enhanced service offerings, including clearer communications, personalised support, improved digital tools, and smoother transitions from scheme administration to insurer administration; features that help ensure members continue to feel supported throughout and after the transaction. Across the market there is an increasing focus on operational efficiency: in the PMI survey, 34% of respondents who had already completed a buy‑in said they expect to move to buyout within the next two years, with a further 41% planning to do so within three to five years – meaning around 75% anticipate completing their buyout transition within the next five years.
Source: PMI survey commissioned by L&G, 20 October 2025 - January 28 2026. Weighted rankings were calculated by assigning 4 points to each respondent’s first choice, 3 points to their second choice, 2 points to their third choice, and 1 point to their fourth choice. The chart displays the total score for each category.
Key risks For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an L&G portfolio. The above information does not constitute a recommendation to buy or sell any security. Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
Investing for run-on When considering the recent industry discussions around ‘run-on’, many trustees may wonder what all the fuss is about. After all, most pension schemes have ‘run-on’ for several decades, often while maintaining a surplus on their technical provisions basis – is there really anything new to consider here? Of course, the fundamentals of pension scheme investment haven’t really changed – pension schemes are still long-term investors who must meet liabilities. So pension schemes will still need to agree their strategy, define their risk tolerance, and then invest in an efficient portfolio which they believe will generate the highest return while staying within that tolerance. They will still need to diversify rewarded risks, seek to protect against unrewarded risks, and carefully manage liquidity. Full cashflow matching has undoubted appeal where possible, but it may be challenging for some pension schemes to achieve. Luckily there are a number of other levers that pension investors can pull to target returns within a cashflow-aware framework. A broad range of alternative credit assets such as emerging market debt and various forms of securitized debt can be incorporated into a cashflow-matching mandate alongside sovereign and corporate bonds. For schemes that can tolerate some illiquidity, this can be supplemented by additional exposure to various forms of cashflow-matching private credit. So will a long-term run-on portfolio look very different to what pension schemes have seen before? Different tolerances for illiquidity, ability to achieve a true cashflow match, and investment beliefs will mean that there is no ‘one-size-fits-all’ answer. Certainly some of the asset classes will look familiar, but trustees’ investment frameworks will need to be refined, risk models made more robust, and investment considered through the lens of cashflow certainty.
Liability cashflow certainty and investment risk tolerance - Investing for run-on
Investing for run-on
Source: L&G, for illustration purposes only. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, and the investor may get back less than the original amount invested. It should be noted that diversification is no guarantee against a loss in a declining market. Assumptions, opinions, and estimates are provided for illustrative purposes only.
Investing for run-on When considering the recent industry discussions around ‘run-on’, many trustees may wonder what all the fuss is about. After all, most pension schemes have ‘run on’ for several decades, often while maintaining a surplus on their technical provisions basis – is there really anything new to consider here? Of course, the fundamentals of pension scheme investment haven’t really changed – pension schemes are still long-term investors who must meet liabilities. So pension schemes will still need to agree their strategy, define their risk tolerance, and then invest in an efficient portfolio which they believe will generate the highest return while staying within that tolerance. They will still need to diversify rewarded risks, seek to protect against unrewarded risks, and carefully manage liquidity. Full cashflow matching has undoubted appeal where possible, but it may be challenging for some pension schemes to achieve. Luckily there are a number of other levers that pension investors can pull to target returns within a cashflow-aware framework. A broad range of alternative credit assets such as emerging market debt and various forms of securitized debt can be incorporated into a cashflow-matching mandate alongside sovereign and corporate bonds. For schemes that can tolerate some illiquidity, this can be supplemented by additional exposure to various forms of cashflow-matching private credit. So will a long-term run-on portfolio look very different to what pension schemes have seen before? Different tolerances for illiquidity, ability to achieve a true cashflow match, and investment beliefs will mean that there is no ‘one-size-fits-all’ answer. Certainly some of the asset classes will look familiar, but trustees’ investment frameworks will need to be refined, risk models made more robust, and investment considered through the lens of cashflow certainty.
Seeking value in bulk annuity transactions
Looking for the ‘best of both’ run-on and buyout? With record numbers of well-funded pension schemes ultimately seeking to insure, one thing is certain – it will take several years for fully funded schemes to collectively achieve their buyout objectives. Whilst they are preparing for buyout, schemes will want to seek to preserve affordability, improve pricing and manage any residual asset surplus. Trying to hedge buyout pricing is easier said than done for three main reasons: • Liability target: Liability cashflows within LDI mandates are typically calculated on a technical provisions basis, from member data as at the latest actuarial valuation and rolled forward over time. By contrast, insurers will project a liability profile using up-to-date member data and by adopting their own views on demographic and other liability risks, resulting in a liability profile with a different shape • Discount rate: A pension scheme may make a prudent assumption on a solvency discount rate – for example ‘gilts-flat’. By contrast, live buyout pricing, expressed on a ‘gilts+x% basis is variable over time, primarily because investment opportunities change • Differences between insurers: While all insurers are bound by the same Solvency UK framework, each will invest and price differently to achieve the most competitive price to win business. A pragmatic approach? We believe the best way to hedge buyout pricing is to transact, but before that, pragmatic steps include updating the liability cashflow target to better reflect solvency assumptions and hedging to a pragmatic prudent discount rate that evolves over time to reflect current pricing levels, including credit sensitivity. For schemes that can afford to pause, pricing could be improved through: • Maturing liabilities • Asset returns and realisation: • Trigger monitoring:
Looking for the ‘best of both’ run-on and buyout? With record numbers of well-funded pension schemes ultimately seeking to insure, one thing is certain – it will take several years for fully funded schemes to collectively achieve their buyout objectives. Whilst they are preparing for buyout, schemes will want to seek to preserve affordability, improve pricing and manage any residual asset surplus. Trying to hedge buyout pricing is easier said than done for three main reasons: • Liability target: Liability cashflows within LDI mandates are typically calculated on a technical provisions basis, from member data as at the latest actuarial valuation and rolled forward over time. By contrast, insurers will project a liability profile using up-to-date member data and by adopting their own views on demographic and other liability risks, resulting in a liability profile with a different shape. • Discount rate: A pension scheme may make a prudent assumption on a solvency discount rate – for example ‘gilts-flat’. By contrast, live buyout pricing, expressed on a ‘gilts+x%’ basis is variable over time, primarily because investment opportunities change. • Differences between insurers: While all insurers are bound by the same Solvency UK framework, each will invest and price differently to achieve the most competitive price to win business. A pragmatic approach? We believe the best way to hedge buyout pricing is to transact, but before that, pragmatic steps include updating the liability cashflow target to better reflect solvency assumptions and hedging to a pragmatic prudent discount rate that evolves over time to reflect current pricing levels, including credit sensitivity. For schemes that can afford to pause, pricing could be improved through: • Maturing liabilities • Asset returns and realisation • Trigger monitoring
The government is making it easier for well-funded DB schemes to release surplus, when ‘safe to do so’, and trustees will need to set out their proposed approach to surplus extraction as part of their statement of strategy. What has been announced so far? The government has set out its intention to amend the rules on surplus extraction, “to allow trustees of well-funded DB schemes to release money back to employers and their scheme members, when ‘safe to do so’, unlocking some of the £160 billion surplus funds to be reinvested across the UK economy and boost business productivity and deliver for members". The Pension Regulator (TPR) has issued guidance on new models and options in DB schemes to help trustees and employers to assess the range of new endgame models and options available across governance, financial and insurance. Once legislation is enacted, TPR will consult and publish further guidance on releasing surplus. A purpose for surplus – what are the options? While, as a long established norm, surplus after buyout has been deployed in accordance with the Scheme Rules, the evolving regulatory framework is expanding the options for the use of surplus – to extract it on an ongoing basis, and to consider sharing the surplus with members of the scheme or potentially members of other DB or DC pension schemes. In the PMI survey, for those trustees that are considering surplus extraction, we asked them to rank their purpose for surplus in order of preference. The response was broadly equal across enhancing member benefits, returning to sponsor or supporting a DC scheme, with a small minority focusing on the ability to invest in UK assets.
To help you weigh up whether surplus extraction is right for your scheme, please read our whitepaper: Running on into retirement?
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If you are considering surplus extraction, rank these factors in order of priority
Source: L&G, PMI survey. Weighted rankings were calculated by assigning 4 points to each respondent’s first choice, 3 points to their second choice, 2 points to their third choice, and 1 point to their fourth choice. The chart displays the total score for each category.
Outside of PRT pricing rank these factors in order of importance - Data requested
DB schemes: Have a plan for endgame and for surplus TPR has issued a call to action that “schemes should have documented policies regarding their long-term objectives and endgame options, including surplus”. A key consideration for trustees considering surplus release will be this question of safety, balancing multiple objectives to: Manage scheme assets to pay pensions and remain fully funded on a low-dependency basis Improve security for members and prepare for contingent events Release surplus under a framework agreement with the sponsor to, for example, enhance member benefits, make payments to a DC scheme or make payments to the employer For more detail on how to approach each of above objectives when weighing up, please read our full analysis: Surplus extraction is here: What should DB schemes do now? Managing residual asset surplus – what’s your target? For schemes that transact insurance, there will be a pause between executing a buy-in and then executing a buyout, realising surplus and winding up the scheme. In this period, how might schemes best invest residual assets? This depends on the purpose of the surplus: · Augment member benefits: Where the final benefits paid to members under the buyout policy can be augmented (increased) with any residual surplus assets, then these assets can be invested to hedge the buyout pricing basis that is defined in the augmentation provision. An investment strategy can be implemented to seek to hedge the augmentation pricing provisions specified by the insurance provider. · Transfer surplus to DC: Where the surplus is to be transferred to an associated DC scheme - to be used to fund future contributions, then the associated DB assets could be invested in a similar way to the intended investment strategy to be applied in the DC strategy, preferably so that the assets are easily transferable (or capable of novation) to the DC scheme. · Release to the employer: Finally, if assets are to be repaid to the employer, then these assets could be invested to seek to maintain or grow the expected value to the employer, for example by investing in a low volatility absolute return or short-dated credit investment approach.
Unlocking DB surplus to strengthen member outcomes A common misconception is that surplus extraction is only achievable through run‑on strategies. In reality, many trustees and sponsors are increasingly taking advantage of attractive insurer pricing to recognise surplus at buyout and deliver meaningful benefit enhancements for members. Indeed, 24 pension schemes that we moved to buyout in 2025 used surplus to enhance their members’ benefits. In June, we launched a solution that enables DB pension schemes to transfer surplus funds into DC arrangements, including our award-winning Mastertrust, which now manages more than £30 billion in assets. Facilitating surplus transfers enables trustees of well-funded DB schemes and employers to strengthen their commitments to members’ DC arrangements, including those in the Mastertrust. L&G’s DC pension products allow for recognised transfers of surplus funds from DB schemes into DC arrangements. Such transfers help employers reduce their ongoing contribution costs or increase contributions to strengthen employee pension outcomes, while remaining compliant with existing scheme rules and tax legislation. In the case of any surplus transaction, existing scheme liabilities (and members) would not be impacted and transferring trustees must be satisfied that making a transfer would be in accordance with scheme rules and fiduciary duties to act in members’ best interests. Through these innovations, we are helping reshape how schemes manage risk, unlock value and improve outcomes for members – supporting trustees and employers as the pensions landscape continues to evolve.
Whether you’re looking to buyout, run-on or both, and would like to discover more about how your choice of endgame could be combined with potential surplus extraction, please listen to our full webinar, contact us, or reach out to your usual L&G representative.
The government is making it easier for well-funded DB schemes to release surplus, when ‘safe to do so’, and trustees will need to set out their proposed approach to surplus extraction as part of their statement of strategy. What has been announced so far? The government has set out its intention to amend the rules on surplus extraction, “to allow trustees of well-funded DB schemes to release money back to employers and their scheme members, when ‘safe to do so’, unlocking some of the £160 billion surplus funds to be reinvested across the UK economy and boost business productivity and deliver for members". The Pension Regulator (TPR) has issued guidance on new models and options in DB schemes to help trustees and employers to assess the range of new endgame models and options available across governance, financial and insurance. Once legislation is enacted, TPR will consult and publish further guidance on releasing surplus. A purpose for surplus – what are the options? While, as a long established norm, surplus after buyout has been deployed in accordance with the Scheme Rules (mostly in repayment to the sponsor), the evolving regulatory framework is expanding the options for the use of surplus – to extract it on an ongoing basis, and to consider sharing the surplus with members of the scheme or potentially members of other DB or DC pension schemes. In the PMI survey, for those trustees that are considering surplus extraction, we asked them to rank their purpose for surplus in order of preference. The response was broadly equal across enhancing member benefits, returning to sponsor or supporting a DC scheme, with a small minority focusing on the ability to invest in UK assets.
