Competition between insurers is driving ‘unprecedented’ buy-in pricing for UK defined benefit (DB) pension schemes, according to LCP.
The consultancy’s latest pension risk transfer (PRT) market update noted that record insurer capacity was exceeding short-term demand.
It also highlighted growing competition from new market entrants, increasing competition for transactions of all sizes.
Buy-in pricing was found to be at its most competitive level ever, compared to holding gilts, in the first quarter of 2026.
The analysis showed that pricing had been broadly unaffected by recent market volatility, with favourable pricing continuing into Q2.
LCP said that many of its clients had been securing even better pricing in Q2 than was available in Q1.
High volumes of buy-ins in 2026 were likely to depend on whether certain £1bn+ deals complete this year or next, the consultancy added.
It expected another year of high activity but not record volumes, meaning that insurer capacity should more than meet demand, with strong competition anticipated to continue for the remainder of the year.
Schemes were found to be placing greater focus on non-price factors, with insurers’ member offerings now cited as a key differentiator.
Furthermore, increased automation and more streamlined operating systems were helping insurers provide faster, more efficient retirement quotations and improved support for member interactions.
Schemes below £100m were accounting for a growing share of the market, with insurers streamlining their offerings to support expanded capacity to quote.
“Twenty years on from the first buy-in, the UK pension risk transfer market is seeing record levels of competition and choice,” said LCP partner, Charlie Finch.
“Strong insurer capacity and heightened competition have driven the attractiveness of buy-in pricing for LCP clients to unprecedented levels in early 2026.
“For well-prepared schemes, the current market presents a compelling pricing opportunity and gives leverage to negotiate bespoke terms for the benefit of members.”
LCP partner, Ruth Ward, added: “Competition is no longer limited to the largest transactions, with smaller schemes benefiting from a wider range of insurers actively participating in this segment and improved access to the market. For trustees and sponsors, that creates a real opportunity.
“Whilst market conditions are favourable, it’s important not to lose sight of the fact that hundreds of schemes are now seeking buy-in quotations. Good quality preparation is therefore critical to stand out from the crowd, achieve strong insurer engagement and ensure efficient post-transaction processes.”
