Rising interest rates have boosted pension risk transfer (PRT) deals between UK defined benefit (DB) pension schemes and insurers to record levels. Growth has been so rapid, however, that some parts of the supporting industry are looking at new ways of operating to keep pace.
Investment in technology, new pre-deal processes and a willingness among insurers to assume some of the work of administrators are all being implemented or considered across the industry to get more deals across the line.
While a couple of decades old now, the UK PRT market is still considered a maturing one because business began picking up significantly around five years ago when interest rates began to rise. That improved DB schemes’ funding positions so much that the majority can now afford to be offloaded to insurers. Skills shortages are typical of maturing markets as they adjust to meet growing demand.
“This is an extraordinary turnaround in terms of pace,” said Dean Wetton, Founder and Managing Director of London-based Dean Wetton Advisory.
“For ages and ages, very few schemes were able to afford to buy-out. But now… there are so many more schemes that can – and it’s happened for all the schemes at the same time. Suddenly we’ve gone from a situation where no one was ready, to one now where everyone’s ready. And that creates a queue.”
Action from administrators and insurers comes amid frustration among some trustees and advisers who have reported difficulties in completing deals because of a shortage of human capital among supporting service providers. Bottlenecks have been reported by schemes seeking buy-ins as well as those wanting to progress to buy-outs.
Even among insurers, business has been so brisk that parties wanting to transact with them have reported having to wait.
“It can be frustrating, but it’s an incredibly busy market and everybody is working to capacity,” said Chris Parrott, Professional Trustee at BESTrustees.
“You’ve got several hundred other schemes in exactly the same place, all trying to get through a very narrow gap to transact with insurers.”
The impacts appear to be mostly at the smaller end of the market, where transactions have grown fastest in the past year. According to WTW’s 2026 de-risking report, nine of the 11 insurers active in 2025 had “selective appetite” for deals smaller than £50m.
That is reflected in last year’s transactions data. Although at £38.2bn, the total value was less than in previous years, the number of individual buy-ins reached a record 367 because of more smaller schemes coming to market. By comparison, there were just seven £1bn-plus deals in 2025, half the record set in 2024.
Wetton said he has experienced difficulties in proceeding with some transactions.
“We weren’t able to go to all of the insurers we wanted to. They all, to a man, said they were full up,” he said.
“It means that we haven’t been able to go to the breadth of the market that we would have liked to.”
Human capital challenges were recognised this year by professional services provider PwC in its first quarter pension risk transfer newsletter. The report noted that the impact has been felt in multiple ways among schemes seeking to go from buy-in to buy-out.
“Given record numbers of buy-in transactions, and already stretched pension administrators, we regularly see timescales for schemes to transition from buy-in to buy-out in excess of two years,” wrote Kelly McGee, Senior Manager, Risk Transactions Specialist at PwC, in the report.
“This lengthy process is costly and has wider implications for trustees and sponsors e.g. delays using surplus to grant member uplifts of employer refunds, accounting implications, etc.”
The Government Actuary’s Department also acknowledged that the increased complexity in administrators’ activities and underinvestment in technology was also making life difficult for them. The market boom comes also as they work through new regulatory expectations, especially pensions dashboards and new data management responsibilities.
“It’s an incredibly busy market for risk transfer and it’s an incredibly busy market for pensions,” said Parrott.
Observers say holdups are being felt around the data reconciliation and legal review processes that must happen before a PRT deal can be complete.
Insurers need all the information they can get on the pensions of the scheme members they’ll be covering. Often, however, they require more data than administrators possess. Also, the data may be stored in formats different to those preferred by insurers. These all make the data cleansing process more time consuming.
Insurers will also require schemes to undergo a legal review of the benefit specifications of their members before beginning any transaction. This process, which is carried out to ensure all policies have been properly drafted, can take a long time to complete, especially if irregularities emerge.
Guaranteed Minimum Pension (GMP) equalisation processes, which were introduced in 2018, are creating further bottlenecks as schemes rectify historical benefit inequalities.
Time lost to these issues is time that could be spent on more deals.
“Just because the broader market’s growing, it doesn’t mean that it’s growing by the amount that it could be growing by,” said Wetton.
“I know we would have completed some of these deals six months ago if it hadn’t been for these capacity constraints.”
Hiring more staff would seem the simplest solution to easing the human capital crunch but there are limits on what organisations can do.
Administrators may be reluctant to hire more staff in a market that shrinks with every deal they do. And insurers’ ability to expand capacity is constrained by the level of capital buffers they must maintain under Solvency II-based regulations.
As well, observers point to a shortage of available workers with suitable skillsets across the pensions industry, a factor that Milliman argued could deter more insurers entering the market.
Nevertheless, LCP has noted that insurers have hired more headcount, with around 400 people in post-transaction teams last year, an increase of 145% since 2022.
Alternative solutions are gaining greater momentum.
Remedies are widely seen in technology, with artificial intelligence expected to assume some of the routine manual work that takes up so much human resource. The PwC report said that improvements had already been made last year to shorten the time between buy-in and buyout, with agentic AI automating some of the process, and that other streamlining actions had been taken, including better pre-planning by stakeholders, more effective project management and greater willingness by insurers to take on the data reconciliation and GMP equalisation processes.
LCP pointed, also, to the templating of smaller transactions as an example of insurers making the de-risking process more efficient and enabling more schemes to reach their end goals.
Bottlenecks may be further relieved if the surge of PRT transactions is tempered by growth in superfunds and if more schemes opt to run on as a result of the Pension Scheme Bill’s proposed new rules on early extraction of surpluses.
For the time being, patience will be a necessary part of schemes’ PRT ambitions.
“Everybody moans about [the situation], and there are undoubted challenges,” said Parrott.
“But it’s a human resources issue and you can’t magically create 400, 500 people to take on the extra work. Where will they come from?”
