The UK pension risk transfer (PRT) market is on track for a record year in 2023, Legal & General's (L&G) PRT Monitor has found, reporting an “unprecedented” acceleration in demand.

The increased demand was driven by more pension schemes being closer to buyout than ever before, with the monitor revealing that the market reached an all-time first half high in 2023.

According to the group, market movements in the past year coupled with structurally higher interest rates significantly improved pension scheme funding levels, taking five years off the average scheme’s projection to its full funding date.

This has translated into record-breaking PRT volumes, as the monitor showed that over £20bn of transactions have been publicly announced in the year so far, with some commentators speculating that the volume could reach around £25bn, which would be just below the total achieved over the full year in 2022.

The monitor also revealed that this increased demand was prevalent across pension schemes of all sizes, although the real “dial-mover” was the number of larger £1bn+ transactions, with around 20 such cases already quoted on in 2023, and six large deals already announced.

This demand is set to continue, as the monitor reported the pipeline for 2023 and beyond is the largest the industry has seen and anticipates record market volumes for the full year.

Commenting on the latest figures, L&G Retirement Institutional chief executive officer, Andrew Kail, stated: “This exciting time represents an inflection point for our market. We have been busy gearing up for increasing demand and look forward to supporting more pension schemes in the months and years ahead.”

The update is in line with other industry analysis, as research from LCP recently that the market was set for a record-breaking year, also pointing out that volumes in the second half of the year have traditionally been larger than the first half.

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