UK. Pension risk settlements reached record high of over £54bn in 2020
The UK pension scheme risk settlement market hit a new record-high figure of over £54bn in 2020, and 2021 could be even bigger, according to analysis from Aon.
The provider said it was possible to conclude that 2020 had broken the £52bn total achieved in 2019 now that all information on deals was available, while it cited “early indications” in its forecast that the new year could be worth even more.
It also noted that the feat had been achieved despite the market having to cope with a global pandemic and “a general lowering of expectations regarding deals”.
Aon senior partner and risk settlement group head, Martin Bird, said: “Despite all the problems and a general lowering of expectations regarding deals, 2020 saw the UK pension scheme risk settlement market – bulk annuities plus longevity swaps – reach over £54bn.
“This result certainly proves the market’s resilience, as well as the real need for risk settlement by schemes and their increasing understanding of how to access the market. However, the market also changed with fewer jumbo deals than we saw in 2019, but a 50 per cent increase in the transactions below £1bn in size.
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