The UK bulk purchase annuity (BPA) market recorded another record year for transactions in 2025, although overall deal value fell compared to recent highs, according to Aon’s UK Risk Settlement Market Update.
It revealed that 367 deals were completed over the year, surpassing the previous record of 293 transactions in 2024 and 227 in 2023.
However, total transaction value reached £38.2bn in 2025, down from £47.7bn in 2024 and £49.1bn in 2023, reflecting a shift towards smaller transactions despite continued high activity.
This followed a “surge” in activity in 2024, when a record number of deals and strong second-half momentum saw £32.5bn transacted in the latter six months alone, driven in part by a rise in large £1bn-plus buy-ins and increased insurer competition.
In contrast, 2025 saw a notable shift towards smaller schemes, with 83% (304) of all transactions coming in under £100m.
Aon noted that competition in this segment intensified, with more insurers actively quoting on sub-£100m transactions and 10 insurers completing deals below £50m, up from eight in 2024.
The number of very small transactions also rose sharply, with 119 deals under £10m completed in 2025, more than double the 58 recorded in 2023.
As a result, the average transaction size has fallen significantly in recent years, dropping from £216m in 2023 to £104m in 2025.
Despite the shift towards smaller deals, insurer appetite remained strong across all segments.
Eight insurers completed more than £1bn of deals during the year, marking the first time this has occurred.
Meanwhile, the second half of 2025 was the busiest six-month period on record by number of transactions, with 207 deals completed, although volumes of £28.5bn fell short of the £32.6bn seen in the second half of 2024.
Large transactions were still a feature of the market, with eight £1bn-plus deals completed in 2025 across four insurers, although this was lower than in previous years.
In terms of insurer activity, Legal & General (L&G) wrote the largest deal of the year, a £4.6bn buy-in with the Ford Pension Scheme, while Aviva, Just Group and L&G collectively accounted for 71% of all deals completed.
Newer entrants also continued to build market share, with Royal London and Utmost increasing their deal volumes significantly, and M&G exceeding £1bn of transactions for the first time.
Beyond bulk annuities, the longevity swap market experienced a strong rebound, recording its busiest year since 2020 with £18.8bn of transactions, more than doubling 2024 volumes (£7.9bn) and surpassing 2023 levels (£10.3bn).
Aon highlighted that improved pricing, increased accessibility for mid-sized schemes and growing appetite to hedge non-pensioner liabilities were driving this growth.
The superfund market also continued to evolve, with Clara completing further transactions and increased regulatory clarity expected following the Pension Schemes Bill, which is set to establish a formal authorisation and supervision framework by 2028.
Looking ahead, Aon claimed 2026 was expected to be another active year for the risk settlement market, with a strong pipeline of transactions and total BPA volumes likely to exceed £40bn.
It also noted that schemes would need to remain “deal-ready” to take advantage of favourable pricing opportunities amid ongoing market volatility.
