Bulk annuity market July 2025 Update

Bulk annuity market July 2025 Update

21 Jul 2025

Current market dynamics reveal continued strong competition in the market, and opportunities for small to mid-sized schemes, driven by available insurance capacity right now.

We examine the competitive landscape and also provide insight on Athora’s purchase of PIC, Virgin Media vs NTL, and surplus reform.

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Market commentary

• H1 volumes in the market have been lower than expected (XPS estimates £10bn - £15bn) although momentum continues at the small and mid-end of the market (XPS estimates 150+ transactions written).
• This is leading to continued opportunities for small to mid-sized schemes as more insurers seek to utilise capacity, with XPS experiencing an increase in the average number of bidders across transactions of all sizes in the market during 2025.

The XPS Bulk Annuity Watch tracker tracks the bulk annuity transaction completed by each provider, by number of deals and volume of premium.

Industry news

Athora Holding Limited has agreed to acquire the parent company of Pension Insurance Corporation for £5.7bn. PIC is a well-established bulk annuity provider and last year accounted for around 17% of the market by volume. On completion, PIC will become the UK insurance business of Athora. There is not anticipated to be any impact on business written to date and going forward Athora’s intention is to continue to grow the PIC business using Athora’s backing to provide more options to Trustees and to invest more in UK housing and infrastructure.

Regulatory and legal

Virgin Media Limited v NTL Pension Trustees Limited – There has been uncertainty around scheme liabilities and member benefit levels following last year’s Court of Appeal judgment, with some schemes waiting for clarity before insuring. The Government issued a statement on 5 June 2025 confirming that it will introduce legislation to give affected pension schemes the ability to retrospectively obtain the relevant actuarial confirmation. This is particularly welcome news for pension schemes, unblocking potentialbarriers to their wider, strategic, de-risking objectives.

Surplus reform – On 29 May 2025, the Government published its response to the Department for Work and Pensions (‘DWP’) February 2024 consultation on ‘Options for Defined Benefit schemes’. Key points are an intention to provide a statutory override to give trustees the discretion to change their scheme rules to allow surplus to be paid on an ongoing basis, and a change in the minimum threshold for surplus extraction from buyout to low dependency (subject to further consultation). XPS anticipates that many schemes will review their longer-term objectives and consider run-on; however, most small to medium size schemes will continue on their journey to buyout.

Find out more

For further information, please get in touch with Stephen Purves, Adrian Marshall or speak to your usual XPS Group contact.