The UK pension risk transfer market is set for a “record-breaking” year in 2025, according to Hymans Robertson.

In its annual risk transfer report, the consultancy said it expects a record-breaking number of transactions across small and larger schemes, a growing superfund market, and an increasing number of endgame options.

The report noted that large transactions are "dominating" bulk annuity volumes, with ten transactions worth more than £1bn already completed.

However, Hymans Robertson partner and head of risk transfer, Lara Desay, said an "unprecedented" number of small schemes had also completed whole scheme buy-ins, with increased automation leading to slicker and more succinct processes and systems.

The alternative risk transfer market has also continued to grow, Hymans Robertson noted, with two more superfund deals taking place in 2024.

"The key theme for last year was the increased capability from insurers and alternative risk transfer providers," according to Desay.

"Headlines of broken records for the industry confirm that risk transfer remains an attractive derisking tool, and this demand is only set to continue. We believe that buy-in volumes will remain, or exceed, the £40bn mark for at least the next five years."

Furthermore, the report claims that new insurers, such as Brookfield Annuity, will grow the market, with most insurers regularly quoting on transactions under £100m.

Desay said 2025 looks set to be a time of "huge growth" for the risk transfer market, with the whole market - both large and small schemes - in a “boom period.”

"For larger schemes with great size has come great opportunity. Improved pension scheme funding, alongside increased scale and ambition from bulk annuity insurers, has combined to stimulate interest in insurers from the largest pension schemes," she continued.

“However, alongside the opportunity, there have also been challenges. Larger schemes are more than likely to have illiquid asset challenges that require time and patience from both sides to work through.

“Allowing ample time and attention to consider a transaction's operational and administrative aspects is also key."

This article was first published on our sister website, Pensions Age.

---