A record-breaking £50bn of pension liabilities were secured with insurers in the UK in 2023, with further increases expected in the year ahead, analysis from Legal & General (L&G) has found.

The surge in UK activity was driven by a series of "landmark" transactions, with five transactions of over £2.5bn announced, compared to just one the previous year and only 10 others between 2014 and 2022.

This included the British Steel Pension Scheme, which became the largest pension scheme in the UK to have fully insured its members benefits, the Boots Pension Scheme, and two pension schemes of the RSA Group, which marked the largest ever single and overall transactions, respectively.

This demand is set to continue, as L&G's analysis found that, in the UK, annualised volumes are projected to settle in the region of £50-60bn, marking a "significant" increase from the average of £31bn seen in the five years prior to 2023.

Allowing for potential ultra-large transactions, L&G suggested that there is also scope for these volumes to spike considerably in any given year.

Record-breaking volumes have also been seen in the US pension risk transfer (PRT) market, as volumes in Q4 2023 are expected to have reached over $12bn, marking a 50 per cent increase from the $8.1bn recorded in Q4 2022.

With PRT demand increasing in both markets, L&G noted that processes are adapting, with its monitor highlighting repeat transactions in the US and an evolving solutions-focus in the UK as particular industry trends.

L&G Retirement Institutional CEO, Andrew Kail, stated: “2023 was a landmark year in which we saw a series of record-breaking transactions. The growth in both the UK and US markets is being driven by dramatically improved pension scheme funding levels.

“In the context of this increasing demand, we’re innovating to expand the de-risking toolkit for pension trustees and sponsors.

"The synergies across our businesses, both in the UK and US, enable us to leverage the full breadth of expertise from across our organisation to help schemes to secure and protect their members’ retirement benefits.”

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