Not yet ready or able to buy out?

How APPs can create a more secure de-risking path

clock • 2 min read

In this article and video we explore how Legal & General’s Assured Payment Policy (APP) can deliver increased certainty to trustees and corporate sponsors of DB pension schemes on the path to buyout.


If you're not ready or able to buy out just yet then you're certainly not alone - only 8% of pension liabilities in the UK have currently been secured with a bulk annuity. The good news is that there are now more options than ever before to help you to take risks off the table and kick-start or progress your de-risking journey. 

Investment, governance and partial insurance solutions can all help pension schemes in this position tailor their paths to their individual circumstances.  An example of a more recent de-risking innovation is Legal & General's Assured Payment Policy, which allows you to lock down investment and inflation risk at a more affordable cost than a bulk annuity.

Our short animated video above provides an overview of the solution and how it can help you to achieve a meaningful risk reduction immediately, while also creating a more secure path to buyout in the future.

How is an APP different from a buy-in?

APPs are much like buy-ins, with one key difference: they do not cover longevity risk or demographic experience.  This means that APP pricing can typically be around 15-20% more affordable than a bulk annuity for deferred pensioner members. An APP can also be used to good effect for pensioner members.

What sort of schemes are APPs suitable for?

APPs are flexible enough to be used in combination with existing de-risking solutions such as buy-ins, enabling pension schemes to define their optimal path through to full scheme buyout. This is true regardless of a pension scheme's size, but particularly for smaller pension schemes.

In late 2019 Legal & General completed its first APP transaction with the AIB Group UK Pension Scheme: a £1.1 billion transaction, consisting of a £250 million APP covering deferred pensioners and an £850 million buy-in covering current pensioners. 

How do I find out more?

Please visit or email [email protected] for further information.

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