PRT market on track for second largest year ever in 2022

Written by Adam Cadle

25/08/2022

The volume of the UK PRT market is expected to reach around £12bn in H1 2022, representing a 50% increase compared to the same period in 2021, according to L&G's Global PRT Monitor.

L&G suggested that this increase in demand from pension schemes will also continue during H2 and into 2023, including an increase in demand from some large pension schemes. As a result, 2022 is on track to become the second largest year ever in the UK market, with the market volume for the year expected to reach £30-35bn, or more depending on the number of large transactions that are completed in the second half of 2022.

However, L&G warned that it is becoming increasingly difficult for insurers to participate in all transactions as demand from pension schemes increases.

In light of this, the group argued that early engagement will help pension schemes to attract insurer interest and make the most of opportunities that may arise.

L&G Retirement Institutional PRT managing director Chris DeMarco commented: “The PRT sector in the UK is yet again proving itself to be an exciting and valuable contributor to the national economy. Thanks to favourable market conditions pension scheme funding levels are improving and buyout affordability is increasing. Insurers are working hard to meet the increased demand from pension schemes and we expect transaction volumes to continue to grow in future years.

“Our message for pension schemes considering a buy-in or buyout transaction in this busy market is simple – schemes who engage insurers early, have flexible timeframes and have prepared thoroughly put themselves in the best position to secure a transaction which best meets their needs.”

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