Employer-driven pension plan shifts propel Legal & General's earnings, arising from the transfer of defined benefit schemes.
In the ever-evolving world of pension investments, the United Kingdom's pension risk transfer (PRT) market is experiencing a significant surge in activity. This trend is expected to continue through 2025 and beyond, with buy-in volumes estimated to remain between £40 billion and £50 billion annually for the third consecutive year[1][2][3].
At the forefront of this growth is Legal & General (L&G), a leading insurer capitalizing on the demand for PRTs. L&G reported that its Institutional Retirement division wrote £3.4 billion of global PRT business in the first half of 2025, more than doubling the previous year, with a strong pipeline including multiple large deals over £1 billion[3]. The firm anticipates continued strong volumes, good profitability, and sustainable growth driven by both new business and optimization of existing portfolios.
The PRT market is not just witnessing growth in traditional players but also the entry of new competitors. Notable among these are Brookfield Wealth Solutions, which has acquired Just Group Plc and aims to challenge established leaders like L&G by targeting up to £50 billion per year in pension buyouts[4][5]. Another new entrant is Athora, backed by Apollo Global Management, which has acquired Pension Insurance Corporation (PIC), signaling a strategic expansion into pension risk transfer[4].
These private equity-backed firms are bringing innovation to the market by integrating insurance risk transfer with asset management services, seeking long-term fee-based revenue streams. This not only increases capital availability but also fosters product innovation, such as hybrid offerings combining insured self-sufficiency and value-sharing structures[5].
Looking ahead to 2033, the UK pension risk transfer market is projected to expand dramatically, possibly handling around £500 billion of pension liabilities as schemes increasingly offload defined benefit obligations[4][5]. This growth is supported by a broadening of insurer options, including at least one new DB superfund expected in 2025, and greater emphasis on insurer selection criteria beyond pricing alone[1].
In summary, the UK pension risk transfer market is robust and rapidly evolving. Legal & General remains a market leader with strong deal flow and profitability. New entrants like Brookfield and Athora are aggressively expanding through acquisitions and innovation. The market is projected to undergo significant growth, driven by larger volumes, more transactions, and increasing participation by private capital. Scheme sponsors are increasingly focused on non-pricing factors alongside competitive pricing when choosing PRT partners[1][4][5].
Elsewhere, L&G announced plans to distribute £5 billion to its shareholders over a three-year period. The group, which manages over £1 trillion in assets, made a profit of £859 million for the period, a 6% increase from last year[6]. L&G's shares dropped 2 per cent in value following the announcement, however[7].
Meanwhile, the Work and Pensions Secretary, Liz Kendall, announced a review of the state pension age alongside a wider probe into retirement savings[8]. As the UK pension landscape continues to evolve, it's clear that both traditional players and new entrants will play crucial roles in shaping its future.
[1] https://www.ft.com/content/8352977a-317d-475b-801f-d78f4e469d4f [2] https://www.ft.com/content/65d3a34e-8f72-450e-b352-e5e388a669c9 [3] https://www.cityam.com/legal-general-writes-3-4bn-worth-of-pension-risk-transfer-deals-in-h1-2025/ [4] https://www.ft.com/content/a648756a-364c-4a3d-b195-2e0e458f0b0b [5] https://www.cityam.com/brookfield-and-athora-set-their-sights-on-the-uk-pension-market/ [6] https://www.cityam.com/legal-general-to-pay-out-5bn-to-shareholders-as-it-reports-strong-half-year-results/ [7] https://www.cityam.com/legal-generals-shares-drop-2-per-cent-after-it-announces-5bn-share-buyback/ [8] https://www.bbc.co.uk/news/business-64880820
- Legal & General (L&G), a leading insurer, anticipates continued strong volumes and sustainable growth in the pension risk transfer (PRT) market, with a focus on both new business and optimization of existing portfolios.
- Brookfield Wealth Solutions, backed by private equity, aims to challenge established players like L&G by targeting up to £50 billion per year in pension buyouts, integrating insurance risk transfer with asset management services for long-term fee-based revenue streams.
- Athora, another new entrant in the PRT market, has acquired Pension Insurance Corporation (PIC), signaling a strategic expansion into pension risk transfer, fostering product innovation such as hybrid offerings combining insured self-sufficiency and value-sharing structures.
- In the realm of personal finance, Legal & General plans to distribute £5 billion to its shareholders over a three-year period, while the Work and Pensions Secretary is undertaking a review of the state pension age and wider probe into retirement savings.
