Pension bulk annuity volumes to top £10bn in 2026
UK pension bulk annuity volumes for the first half of 2026 are expected to exceed £10bn, surpassing the £9.7bn of transactions completed during the same period last year, according to Aon.
Market momentum continues
The market remained highly competitive and active during the first six months of the year, with transaction volumes expected to be weighted towards the second half of 2026 as several large deals progress towards completion. Since the end of June, insurers have reported a further £6.4bn of transactions that have either been signed or entered into exclusivity. Aon noted that this figure represents a significant accumulation of activity in a short timeframe, illustrating the robust pipeline that has developed over the last few months.
Aon Risk Settlement Group head of insurer due diligence, Sam Matto-Willey, said the market remained “exceptionally strong” and very active.
“Based on transactions announced to date, we expect bulk annuity volumes for the first six months of 2026 to exceed £10bn,” Matto-Willey said. “That’s more than in the first half of 2025, when there were £9.7bn of transactions completed.”
Competition between insurers remained intense and scheme demand continued to be high, with attractive opportunities remaining available across different transaction sizes. Aon highlighted a growing insurer appetite for small and medium-sized deals, noting that fewer multi-billion-pound transactions were encouraging more insurers to target smaller schemes to meet business objectives. In particular, Aon highlighted a growing insurer appetite for small and medium-sized deals, with fewer multi-billion-pound transactions encouraging more insurers to target smaller schemes to meet business objectives. The consultancy also noted that more insurers had launched dedicated small-scheme propositions during 2026, specifically tailored to address the needs of these specific segments.
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Evolution in structure and service
Aon noted one of the defining themes of the market this year had been the speed at which insurer propositions continued to evolve. Market growth had encouraged insurers to broaden their search for attractive assets, with many developing relationships with global investment firms. This strategic shift allows insurers to diversify their risk profiles and access a wider range of investment vehicles to support their annuity liabilities.
Innovation has also extended to the member experience, with some insurers increasingly allowing members to manage their pensions digitally alongside enhanced call-centre support for vulnerable customers and the potential use of live calculations. Aon argued there was also greater variation in transaction structures as insurers sought to meet specific scheme and sponsor requirements, including desired buyout timings, the use of scheme surplus and arrangements that could allow members to share in future asset gains.
Against this backdrop, Aon Insurer Due Diligence partner Dominic Grimley said trustees were placing greater emphasis on due diligence as propositions became more sophisticated and differentiated.
“Factors such as member experience, financial strength, ESG credentials and cyber resilience are increasingly important points of comparison,” he added.
