Over £800m secured for smaller pension schemes using L&G Flow
Since the start of 2022, Legal and General Assurance Society Limited (“L&G”) has cumulatively insured more than £800m of pension liabilities using L&G Flow, its tailored solution for smaller pension schemes, securing the benefits of thousands of pension scheme members across the UK.
The growth in the Pension Risk Transfer (PRT) market over the past few years has been broad based, but recent LCP1 data suggests that smaller scheme transactions below £100m made up almost 80% of all transactions in 2024, with a 60% growth in ‘micro’ scheme transactions under £10m. This demonstrates the vitality of the PRT market for smaller schemes but also raises an operational challenge, as pension scheme administrators and insurers’ post-transaction teams alike are faced with a growing workload.
Of the pension schemes that have completed a buy-in under L&G Flow, nearly 20% have completed a full buyout already, while other schemes have made positive progress on Guaranteed Minimum Pension (GMP) equalisation, data cleansing and payroll handover to L&G.
L&G Flow provides tailored, end-to-end support for smaller pension schemes, with dedicated resources to work with schemes’ existing administration processes. Following enhancements in 2024, L&G Flow enables efficient data cleansing, payroll matching and project management, to ensure trustees have a smooth journey from buy-in to buyout in their chosen timescales. L&G intends to increase the number of transactions completed under Flow in a controlled and sustainable way.
Over 80% of L&G’s Flow transactions so far have been with clients of its Asset Management business, who additionally benefit from the ability to novate their unit funds as premium payment, increasing price certainty and removing asset restructuring costs.
Working with 15 different consultancies in the past year, L&G Flow transactions included buy-ins with the pension schemes of Walkers Shortbread, The Leprosy Mission International, and John Graham Construction, and a recently announced £112m full buy-in with the Fullers, Smith and Turner scheme, L&G’s largest Flow transaction of 2024.
Andrew Kail, CEO, Institutional Retirement, L&G commented: "These transactions under L&G Flow demonstrate our commitment to serving the entire market. Activity across the PRT market remains exceptionally strong, and this is particularly true for smaller pension schemes.”
L&G Flow is a flexible solution that has been specifically designed for smaller pension schemes. It typically appeals to pension schemes under £150m and has been used to help schemes as small as £2m. In the year to date, L&G has completed or is in exclusive negotiations on £110m of Flow deals, with many more expected to transact this year.
Dominic Moret, Head of Origination and Execution, Institutional Retirement, L&G added: “Given the varying demands on pension scheme trustees and administrators, we identified a need to deliver a solution for smaller schemes which is not just focused on completing a buy-in transaction, but on working with trustees and administrators collaboratively to move the scheme to buyout. Through Flow we can provide a sustainable solution for smaller pension schemes to access immediately transactable pricing, flexible premium payment, and tailored post-transaction support, so that we can continue to provide customers and clients with the world-class service that they expect from L&G.”
Further information
Andrew Gates
Head of External Communications, Asset Management
Notes to editors
Established in 1836, L&G is one of the UK's leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY25) of which c. 43% (c. £0.5 trillion) is international. We have a highly synergistic business model, which continues to drive strong returns. We are a leading player in Institutional Retirement, in Retail Savings and Protection, and in Asset Management through both public and private markets. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
Institutional Retirement works with trustees and sponsoring companies of defined benefit (DB) pension schemes of all sizes to settle their pension obligations and secure scheme members’ benefits, through a full range of buy-ins, buyouts and other de-risking solutions. L&G is the UK’s longest-standing active bulk annuity provider and our total annuity book stands at an estimated £96 billion as at HY25. L&G provides income and pension security to more than a million retirement customers around the world.