The UK’s BP Pension Fund has completed a £1.6bn (€1.8bn) buy-in with Legal & General, marking the first transaction for the £18bn fund.
The transaction was defined by close collaboration between the two parties, including agreeing on terms to further support the security of members’ benefits.
L&G provided the fund with a Gilt-based price lock using the fund’s Gilt holdings, which ensured price certainty while the terms of the transaction were finalised.
The price lock facilitated the smooth progression of the transaction during a period of heightened market volatility, L&G said.
The trustee was advised by Aon as lead transaction adviser, with Linklaters providing legal advice and Cardano providing insurer covenant advice. Mercer acted as scheme actuary with Redington providing strategic investment advice to the trustee.
Macfarlanes and DLA Piper provided legal advice to L&G.
Brendan Nelson, trustee chair, said: “This buy-in follows a detailed review of the options available to support the fund’s de-risking journey and hence the security of members’ accrued benefits.”
Record activity levels
Earlier this week, consultancy LCP published an analysis of insurers’ half-year 2025 results, which showed record transaction numbers with buy-in/out volumes by UK pension funds set to exceed £40bn for the full year, with a record 350 transactions.
The analysis shows that in the first half of the year, 155 transactions were completed, up by almost 20% on the first half of 2024, which saw 133 transactions. This represents significant and sustained 23% per annum average growth over the three years to 30 June 2025, primarily driven by smaller schemes.
Sub-£100m buy-ins/outs accounted for over 85% of all transactions by number in H1 2025 (up from 78% for FY 2024 and c70% for FY 2022 and 2023).
Despite record activity, total buy-in/out volumes in H1 2025 were relatively muted at £9.7bn, the lowest since 2021, down from £15.2bn in H1 2024 and a record £21.1bn in H1 2023.
This, LCP said, showed there was only one transaction over £1bn in H1 2025, an unnamed £1.1bn buy-in with L&G. This compares to two in H1 2024 and five in H1 2023 including much larger transactions, such as NatWest’s £3.4bn with Rothesay in H1 2024, and British Steel Pension Scheme’s £2.7bn with L&G, and RSA’s £6.5bn with PIC in H1 2023).
LCP noted that volumes have picked up substantially in the second half of the year, with around £8bn of transactions already announced, including two buy-ins over £1bn: a £4.3bn full buy-in by the Rolls-Royce UK Pension Fund with PIC – making it the largest UK scheme to reach full insurance at c£9bn – and Standard Life’s £1.9bn full buy-in for the Sedgwick Section of the MMC UK Pension Fund – the insurer’s largest transaction to date.
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