Total pension scheme buy-in and buy-out volumes reached £27.9 billion in 2022 according to latest research from Hymans Robertson. Demand for transactions continued to gather pace during 2022 with market volatility resulting in a busy second half of the year and the total number of 2022 transactions was at the highest level for nearly 10 years. Had interest rates been comparable to prior years, then 2022 would have been "close to a record year" for the market, potentially beating the £43.8bn record set in 2019.

In total 203 transactions took place during 2022 with an average transaction size of c£140m, with 125 transactions transacting in H2 2022.

Commenting on the findings, James Mullins, Head of Risk Transfer at Hymans Robertson, comments:

“Despite market volatility and a year full of challenges for pension scheme trustees, the risk transfer market remained resilient and Q4 2022 in particular saw a flurry of activity as pension schemes captured excellent pricing opportunities at levels rarely seen before.

“With many pension schemes seeing significant improvements in their funding position, 2023 is set to be an extremely busy year for the industry and we expect insurers will be looking for innovative ways to adapt to the growing demand and increase buy-in and buy-out volumes, whilst pension schemes will need to be smarter in how they prepare and approach the market for buy-in quotations.

“Looking through 2023 and beyond, a tidal wave of demand is expected to lead to record buy-out volumes exceeding £50bn a year and we believe that the market has the potential to hit £70bn over the next few years. We expect that by 2030, half of all of the UK’s private sector DB pension scheme liabilities will have been insured, covering 5 million members’ benefits and close to £1trn of liabilities."

A copy of Hymans Robertson’s latest Risk Transfer Report 2023 can be accessed here for more detail about developments in the bulk annuity market.