The pension risk transfer market in the UK has delivered plenty of talking points in 2025 so far in what has been another busy year for the space. Greg Winterton spoke to Pretty Sagoo, Managing Director of Defined Benefit Solutions at Just Group, to get a risk buyer’s perspective on the current state of the market and the outlook for the balance of the year.
GW: Pretty, one of the topics du jour in the UK PRT market has been that of the resilience of the smaller end of the market in the sense that it has not been crowded out by the bigger deals. To what do you attribute that?
PS: In 2025 so far what we’ve seen, across the market, is continuing strength at the smaller end of the market, with not that many large deals, at least in H1, which has helped the smaller end of the market not get crowded out.
Smaller schemes are continuing to proactively leverage improved funding levels as a result of higher interest rates, with a desire to lock these in before any meaningful interest rate drops are seen. They want to secure their members’ benefits, reduce risk and eliminate their outsized administrative burden, and they want to do it at today’s attractive prices.
GW: There have been two new insurers enter the market this year, bringing the total to 11 so far. How has this increased competition impacted the market overall from your perspective?
PS: Ultimately, competition is good for the market and good for schemes and trustees as it allows them to make decisions that work best for them and to be sure they’re getting well-priced deals, with the right structure and additional benefits.
There are still many DB pensions seeking a de-risking solution, so demand is still very high; at Just, we’re having another busy year, after a very active 2024.
One impact of the new entrants is that when price is similar, trustees take the opportunity to really look at the differentiators between providers in respect of member care and options.
GW: What are some of the non-price questions that Just Group is fielding from trustees and de-risking consultants currently, and have these changed at all in the past couple of years?
PS: There is a notable shift that we hugely welcome. Trustees are considering the overall experience their members can expect, including additional benefits and the expected quality of the service, both at transition and over the long-term. Trustees value features such as professional financial advice and support for vulnerable members, which gives them additional comfort when making de-risking decisions.
GW: What are the two or three pieces of advice you would give to trustees that are yet to begin their de-risking journey?
PS: Good data is the cornerstone of a successful transaction, making working with your advisors and administrators to get your data into good shape as soon as possible, is very important.
Administrators are also squeezed right now in a busy market, so selecting an insurer who can assist the scheme and administrator at the early stages in preparation for the transaction is helpful.
Ultimately, trustees are responsible for data but our advice is that they should leverage the wider team at the start of any de-risking planning to understand the gaps and prepare for them. GMP equalisation and spousal data challenges are two common examples that planning can start for early [in the transfer].
Engaging with the wider team early is also important and improves the process and communication. The more engaged the sponsor, the advisor and the administrator are from the start, the more likely it is that the process will be seamless and any challenges can be identified and managed early.
GW: Lastly, Pretty, all the talk at the beginning of the year was that 2025 would end up delivering a similar, or for the bulls, a record year (yet again) in terms of aggregate premium. Now that we’re entering the home stretch, where do you think the market will end up when all is said and done?
PS: Right now, the consensus is that the total market size for 2025 is going to be around £40-45billion. What we’ve seen is that the year started slower, and that the larger transactions aren’t at last year’s level so it will depend on whether some of the larger transactions do come through or if they’re delayed until 2026.
Pretty Sagoo is Managing Director of Defined Benefit Solutions at Just Group
