Pensions - Articles - DB bulk annuity market favours full scheme transactions


XPS Pension Group’s latest Bulk Annuity Tracker has revealed that full scheme transactions now dominate the defined benefit (DB) pensions bulk annuity landscape as schemes’ funding positions have improved significantly over the last few years.

 This trend away from pensioner only buy-ins to full scheme transactions has continued in 2023, with all £10bn of deals announced in the year so far being full scheme transactions. This is due to the significant funding gains made last year and concerns about liquidity for those schemes previously contemplating phased pensioner buy-ins.

 In a clear indication of rising funding levels, XPS’s DB:UK tracker has estimated that buyout funding levels increased for a portfolio of typical schemes from 69% at the start of 2022, to 95% at the end of 2022. A combination of higher gilt yields, lower cost longevity pricing, insurer competition and asset outperformance has improved the affordability of full buyout for lots of schemes.

 Harry Harper, XPS Risk Settlement Partner commented: “As a result of improved scheme funding, the bulk annuity market is now busier than it’s ever been, with record volumes in the market and some insurers already in exclusivity arrangements on a number of significant buyout transactions. We fully expect 2023 to be a record year, exceeding 2019’s £44bn of transactions. With such high demand, we are seeing insurers become increasingly selective on which deals they’ll bid on, making it more important than ever for schemes to adequately prepare for transactions ahead of going to market.”
 
 
 
 
 XPS bulk annuity tracker
  

Back to Index


Similar News to this Story

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.