• 86% of trustees anticipate their scheme approaching an insurer for a Bulk Purchase Annuity (BPA) transaction within the next five years
  • The increased appetite for deals follows a year of improved scheme funding levels, driven by higher interest rates

A surge in bulk annuity deals is anticipated over the next five years, with over four fifths (86%) of pension scheme trustees expecting to approach an insurer in the next five years, according to new research from Standard Life, part of Phoenix Group.

The research among 50 pension trustees managing DB schemes with assets over £100 million*, found that 50% anticipate their scheme will approach an insurer about a buy-in or buy-out in the next one to five years. Over a third (36%) anticipate approaching an insurer even sooner, within the next year.

This high demand for de-risking activity comes as more than 92% of trustees reported that the economic environment over the last year has improved their scheme funding level, with DB schemes having benefitted from factors including a rise in gilt yields, high inflation rates, and slowing longevity improvements.

Kunal Sood, Managing Director of Defined Benefit Solutions and Reinsurance, at Standard Life, comments: “Bulk purchase annuity (BPA) deals have long been considered the gold standard when it comes to de-risking, but sufficient funding is a key factor and for many pension schemes, a BPA deal was not in their short-term horizon, even just a year ago. However, driven in part by the increase in gilt yields and inflation rates, scheme funding levels have improved to the point where BPA deals are now a near-term solution for many DB schemes, as our research shows. This new funding environment has helped drive demand across the market, which is on track to meet expectations that 2023 will be a record-breaking year in terms of BPA deal volumes.”

Additionally, 95% of trustees reported that pricing was an important factor that determines whether they choose buy-in or buyout as their endgame strategy.

Kunal Sood continued: “Trustees have many factors to consider when it comes to their de-risking strategy, however, with many schemes in a strong funding position, it is unlikely the current appetite for buy-ins and buyout will slow down. This means it is crucial that schemes prioritise preparation and ensure they have clarity on their requirements and objectives, so that they are well prepared to maximise insurer engagement. This will help schemes keep pace in a fast-moving market and ensure their de-risking journey is smooth and successful.” 


Notes to editors:

*Research conducted by Censuswide on behalf of Standard Life, between 28th April 2023 – 9th May 2023, amongst 50 DB Pension Scheme Trustees, of Schemes larger than £100m.  

Media Enquiries

For further information, photos, video content or interviews, contact:

Jennifer Smallwood
Senior PR Manager
Standard Life, part of Phoenix Group
07858 367818

About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years 
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
  • Standard Life is the proud headline sponsor of Race for Life, Cancer Research UK’s flagship fundraising event series.

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