Total pension scheme buy-in and buy-out volumes reached £12bn in the first half of 2022 according to the latest research from Hymans Robertson. Demand for transactions was steady at the start of the year, the analysis from the leading pensions and financial services consultancy found, and gathered pace from Q2 onwards. During the same six-month period, Hymans Robertson led the advice on £2.5bn of pension scheme risk transfer transactions.

In total £12bn of buy-ins and buy-outs took place across over 78 transactions during H1 2022 with an average transaction size of £153m. Approximately 75% of that volume was in relation to buy-ins and the remaining 25% related to buy-outs.

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

“Widening credit spreads and insurers competing to meet new business targets led to highly attractive buy-in and buy-out pricing for DB pension schemes who approached the market during 2022.

“Over the last 15 years, around 80% of the market has been pensioner buy-ins and 20% has been buy-outs. Going forward, I expect that trend to reverse, with whole-scheme buy-ins and buy-outs dominating the market from now on.

“The rapid growth in demand for pension schemes to insure their risks, along with improved pension scheme funding levels, attractive insurer pricing and new alternative risk transfer options, means that we expect over £50bn a year of buy-ins and buy-outs on average over the next 10 years. That means that, by the end of 2031, £1 trillion of pension scheme liabilities will have been insured, covering 5 million members’ benefits.”

A copy of Hymans Robertson half yearly update (H1 2022) Risk Transfer report can be accessed here.