Aug 9, 2022

L&G boosted as companies rush to offload pension schemes

The pipeline of deals that enable companies to offload a chunk or all of their pension liabilities to insurers is the strongest it has been, according to L&G's chief executive, as the market benefits from rising interest rates. That has been exacerbated by rising interest rates, which have boosted pension schemes' funding levels to their highest level in a decade and made a deal viable for many. L&G did £4.4bn of so-called bulk-annuity deals in the first six months of the year, including its largest ever US transaction and deals with pension schemes for British Steel and Heathrow airport, among others. About £2tn of pension scheme liabilities - essentially, the future payouts to pensioners - sit on UK companies' balance sheets. Its analysts cited the past five years of increasing employer contributions, which alongside higher interest rates have lifted funding levels, as the key factors helping pension schemes to do deals.

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