UK pension settlements are expected to accelerate through the end of 2026 and into 2027 after a relatively subdued start to the year, Aon said on October 21, 2026. The firm pointed to strong scheme funding, attractive insurer pricing and a growing pipeline that includes several very large pension schemes.
Key Takeaways
- Aon expects high transaction volumes through year-end 2026 and into 2027.
- Insurer competition and access to external capital are helping improve pricing, the firm says.
- Some trustees are treating continued scheme operation as a transition toward an eventual buyout.
Table of Contents
- UK pension settlements outlook rests on a growing pipeline
- Insurer competition is widening the opportunity for deals
- A transitional route toward buyout gains traction
- Conclusion
UK pension settlements outlook rests on a growing pipeline
Aon's October 2026 market update describes an expanding pipeline of pension risk settlement transactions. Martin Bird, senior partner and UK head of risk settlement, said activity was starting to surge following the slower opening to 2026, with several very large schemes among those preparing transactions.
The outlook is an expectation rather than a reported total for completed deals. Aon did not provide a transaction-value forecast or a numerical comparison with the same period of 2025.
Bird also said strong funding and attractive insurer pricing were supporting “surplus deals” intended to lock in favourable balance sheet positions and secure member benefits.
| Item | Details |
|---|---|
| Traditional bulk annuities | An established settlement option identified in Aon's update. |
| Superfund transfers | One of the alternatives expanding the choices available to trustees. |
| Capital-backed run-on | Another model schemes can assess against their objectives and circumstances. |
Insurer competition is widening the opportunity for deals
John Baines, a senior partner at Aon, identified insurer pricing as the most significant current driver of activity. He said pricing had improved significantly over the preceding 12 months, supported by strong competition and insurers' growing access to external capital.
With insurers actively seeking new business, Baines said some schemes could now consider transactions that previously appeared out of reach. The practical change is a wider set of potentially achievable options, rather than a single settlement route becoming appropriate for every scheme.
Alternatives to traditional bulk annuities are also influencing the market. Baines said competition from superfund transfers and capital-backed run-on models was encouraging insurers to innovate.
A transitional route toward buyout gains traction
Bird said trustees increasingly see running a scheme on as a transitional stage toward an eventual buyout, rather than simply an alternative to it. He described this more controlled approach as a “run-in” strategy.
The additional time can be used to build resilience, improve member outcomes and maximise value, he said. That shifts the decision from whether to pursue buyout toward how and when to prepare for it.
More choice also makes governance more demanding. Baines said trustees needed the information, advice and governance framework to assess a broader range of risks and trade-offs with confidence.
Conclusion
The next test for Aon's outlook is how much of the growing pipeline converts into completed transactions over the remainder of 2026 and into 2027. For trustees, the expanding choice of settlement routes also puts greater weight on preparation and governance.
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