Bulk annuity market April 2025 Update
Bulk annuity market April 2025 Update
15 Apr 2025
There are currently opportunities for small to mid-sized schemes in the market, as some insurers temporarily widen their traditional target markets. Opportunities may also arise across the market as credit spreads widen in the face of increased market volatility.
We explore trends in the market and pricing and review the outlook for the rest of the year.
Market commentary
- There are a fewer number of large transactions actively seeking quotations in the market
currently. This is leading to opportunities for small to mid-sized schemes as insurers widen
their traditional target markets to utilise capacity. - XPS has observed increased competition on transactions taken to market in Q1, 2025,
with a material increase in the number of bidding insurers per transaction. - Insurers have released final figures for the year with overall volumes at just under £48bn
(comparing with £49.1bn in 2023) and the number of deals hitting record levels and
approaching 300 across the market. The XPS Bulk Annuity Watch tracker tracks the bulk
annuity transactions completed by each provider, by number of deals and volume of premium.
Pricing levels
XPS closely tracks pricing through pricing feeds from insurers and real-life transaction pricing across deals of all sizes. Average pricing over the past 24 months (relative to gilt yields) is illustrated below:
Note: The pricing is based on observed market pricing and model points from bulk annuity insurers. Actual bulk annuity pricing is specific to a particular scheme’s demographic and benefit profile, and other wider factors influencing appetite for a transaction.
Market volatility
There has been a period of significant market volatility following tariff announcements in the US. While equity markets are volatile, those schemes without equity exposure may benefit from more attractive insurer pricing due to widening credit spreads.
Funding, investment and other news
Rising gilt yields towards the year-end have improved aggregate funding levels from what were already at historically high levels. See XPS DB:UK Funding Tracker below.
Industry news
- The market for smaller schemes continues to be buoyant, and XPS has seen a return to a more competitive landscape with multiple insurers vying for business in the sub-£100m space. There has been a record number of deals in 2024 (c.300), with around 80% of those deals under £100m. Market capacity was bolstered by Royal London and Utmost entering the market earlier in the year.
- Insurer streamlined-solutions continue to dominate in this market, Aviva’s “Clarity”, Just’s “Beacon”, L&G’s “Flow, and PIC’s “Mosaic” processes all offering a structured way through the bulk annuity journey.
- Brookfield’s long-rumoured entry to the market was confirmed in March and the Toronto based insurer is actively looking to write business through its UK insurance arm, Blumont.
Outlook for 2025
Sub-£100m transactions - insurers have become more active at the smaller end of the market with new propositions and capacity available helping pension schemes attain competitive pricing. XPS has seen a greater number of insurers participating in bidding processes, giving trustees a greater choice in terms of insurer and helping to drive competitive terms.
XPS’s experience remains that well-prepared schemes with well thought-out strategies continue to receive attractive pricing regardless of size.
Find out more
For further information, please get in touch with Stephen Purves, Adrian Marshall or speak to your usual XPS Group contact.
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