Lloyds Banking Group Pensions Trustees has entered three new longevity insurance and reinsurance arrangements to further protect the Lloyds Banking Group pension schemes from the cost of unexpected increases in the life expectancy of its members, totalling £4.8bn (€5.5bn).
The new longevity insurance and reinsurance arrangements cover £3.1bn of pensioner liabilities in the Lloyds Bank Pension Scheme No.1; £0.7bn in the Lloyds Bank Pension Scheme No.2; and £1bn in the HBOS Final Salary Pension Scheme.
The first two of these transactions closed in December 2025, and the final one in September 2025.
All three of the transactions are structured as insurance policies with Rothesay Life as the insurer, with reinsurance provided by a major global reinsurer for the Lloyds No.1 and Lloyds No.2 pension funds and an insurance subsidiary of US-based Prudential Financial Inc. (PFI), a large, multi-national financial services company for the HBOS fund.
These latest transactions follow previous insurance and reinsurance arrangements that the trustee has entered into between 2020 and 2025, in total covering over £25bn of liabilities across the Lloyds Banking Group pension schemes.
The most recent transaction included two longevity insurance and reinsurance arrangements in March 2025 for Lloyds Bank Pension Scheme No.2 and HBOS Final Salary Pension scheme, totalling £5.1bn.
Lloyds said that the decision to enter into these transactions will not change the pension benefits that will be paid to pension fund members. It added that all pensioners will continue to receive their pensions each month as normal, and these will continue to be paid by the schemes.
Vicky Paramour, trustee director and chair of the investment and funding committee, said the transactions further reduce the schemes’ exposure to longevity risk and make the schemes more secure to the benefit of all members.
She said: “The selection of Rothesay and the reinsurers followed a fair, robust and transparent review of the longevity insurance and reinsurance options available across the market.”
Ben Howe, head of reinsurance at Rothesay, added: “Within a busy pension risk transfer market, the transactions demonstrate the continued high demand for longevity protection for UK pension schemes as part of their wider strategy to mitigate potential funding volatility.
“A collaborative and solutions-led approach across all parties facilitated a timely and efficient process in the completion of both insurance and reinsurance arrangements.”
Rohit Mathur, head of international reinsurance at PFI, said: “With our broad capabilities and expertise, PFI is exceptionally positioned to address the evolving needs of pension schemes around the globe and in expanding access to retirement security.”
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