UK insurers are set to absorb up to £350 billion of investment-grade private credit within the next decade as they take on legacy pension liabilities, prompting industry expansion and regulatory scrutiny amid fears of concentration risks.
According to a report by Alternative Credit Investor, UK insurers are preparing to absorb roughly £350bn of investment-grade private credit as they take on legacy defined benefit pension liabilities from large corporates over the next seven to ten years. That figure forms part of an anticipated £700bn of pension transfers that will move onto insurers’ balance sheets from schemes currently held by companies such as GSK and HSBC, the report says.
Michael Eakins, chief investment officer at Standard Life, told Alternative Credit Investor that insurers will need to generate about 3.5 times the current stock of private credit to meet demand. “Taking a step back, the aggregate amount of private credit on insurance company balance sheets today is about £100bn, so in the next seven to 10 years, UK insurers need to originate and generate 3.5 times the current quantum of private credit that exists today,” he said. Standard Life recently completed a £700m bulk purchase annuity with the Deloitte UK pension scheme and, Eakins added, around half of that deal will be routed into private credit.
Eakins set out the case insurers advance for locking substantial capital into private credit: enhanced security, higher income and closer alignment with long‑dated liabilities. “If we look at the average uplift of private credit that we were able to extract in 2024 over public credit, it was about 70 basis points. So, the average rating on our private credit portfolio is single A- and we are able to originate that at 70 basis points wider than public credit,” he said. Standard Life intends to focus its deployment on real estate debt, infrastructure lending and structured credit such as collateralised loan obligations and asset‑backed finance.
Regulatory changes have helped pave the way. According to the Alternative Credit Investor piece, both the EU’s Solvency II framework and the post‑Brexit Solvency UK regime have provided insurers with more accommodating capital treatment for long‑duration, predictable cashflows, encouraging a shift into private markets. Eakins described recent Solvency UK reforms as “really helpful,” noting greater flexibility around investments with concentration characteristics, even while he contended Standard Life is cautious about taking such concentrations.
The move by UK life companies mirrors broader expansion in the private credit market. Industry analysis from M&G highlights the rapid ascent of private credit as a key allocation for insurers, noting European life insurers held about €500bn, or roughly 13% of assets, in private credit in 2024, with UK life firms typically allocating more , around 18% , driven in part by demand for non‑surrenderable annuities and the growing bulk annuity market. Fundraising data reported by S&P Global and Preqin further point to a surge in European private credit capital in 2025, with Europe‑focused funds raising an outsized share of global totals early in the year and record levels of fundraising through the first nine months of 2025.
That expansion has prompted scrutiny. The Bank of England has launched a system‑wide exploratory scenario testing private credit and equity exposures to probe vulnerabilities to market stress, according to the lead report. Regulators and market observers have expressed concerns about transparency, valuation practices and the potential for concentration risk as insurers scale up large private credit allocations.
Standard Life says it will manage those risks through sector and currency diversification and by avoiding cyclical industries. “We will pivot to defensive, non‑cyclical sectors and we will invest across different sectors,” Eakins said, adding the firm will originate loans in multiple currencies and hedge non‑sterling cashflows to term. The company is also expanding its internal capability: according to Standard Life’s own announcements, it is introducing private assets into managed funds via a joint venture with Schroders, Future Growth Capital, with a phased integration beginning November 2025 and an initial target allocation that the group expects to increase over time.
Market participants warn that accommodating £350bn of new private credit will require a substantial increase in origination capacity and due diligence, and will likely accelerate the entry of alternative asset managers and private equity firms into credit strategies. Preqin and S&P Global analysis cited in industry briefings suggests private credit AUM is on a trajectory to grow markedly through the remainder of the decade, a shift that could reshape fixed‑income markets and the distribution of yield across public and private instruments.
As insurers expand their footprint in private lending, the balance between higher returns and potential systemic vulnerabilities will remain a central theme for investors and regulators. Industry data and recent policy moves offer a backdrop that supports greater allocation to private credit, but the speed and scale of deployment will be watched closely for signs of concentration, valuation stress or liquidity mismatch that could test the resilience of the financial system.
- https://alternativecreditinvestor.com/2026/03/04/uk-insurers-pile-350bn-into-private-credit-sector/ – Please view link – unable to able to access data
- https://alternativecreditinvestor.com/2026/03/04/uk-insurers-pile-350bn-into-private-credit-sector/ – UK insurers are set to invest £350bn into investment-grade private credit in the coming years, as legacy pension funds offload £1tn onto their balance sheets. Large corporates, including pharmaceutical giant GSK and UK bank HSBC, currently hold sizeable legacy defined benefit (DB) pension schemes worth around £1tn. Over the next seven to 10 years, £700bn, roughly 70 per cent, is set to be unloaded onto insurance company balance sheets, with half of this figure – £350bn – earmarked for private credit and the remainder going into public fixed income. Michael Eakins, chief investment officer at Standard Life, stated that UK insurers need to originate and generate 3.5 times the current quantum of private credit that exists today. Standard Life concluded a £700m bulk purchase annuity transaction with the Deloitte UK pension scheme, bringing new assets onto the insurer’s balance sheet, with half of this invested in private credit. The £350bn will be allocated to private credit across different currencies, including sterling, dollar, euro, Aussie dollar, and Japanese yen. The rationale for locking in £350bn in private credit includes security, higher yield, and liability matching. Eakins noted that in 2024, the average uplift of private credit over public credit was about 70 basis points. Standard Life plans to deploy capital in private credit across real estate debt, infrastructure debt, and structured credit. The EU’s Solvency II framework and the post-Brexit Solvency UK regime have supported the growing trend of private credit allocations on insurers’ balance sheets, providing more flexible capital treatment and encouraging investment in long-duration assets. However, concerns over transparency and potential systemic risks to the UK financial system have arisen, leading the Bank of England to launch a stress test assessing both the private credit and equity markets. To mitigate concentration risk, Standard Life avoids cyclical sectors such as leisure and hotels and invests across different sectors and currencies, hedging non-sterling cash flows.
- https://www.standardlife.co.uk/adviser/business-support/news/introducing-private-assets-to-managed-funds – Standard Life has announced a strategic review to introduce private assets to its managed funds, aiming to improve long-term financial returns for clients. The company has entered a joint venture with Schroders called Future Growth Capital (FGC), leveraging Schroders’ £77 billion private market capability. Through FGC, private assets will be gradually introduced to the managed funds over 18 months, starting from November 2025. The initial target private assets allocation is 2.5%, with expectations to rise to around 5% over time. Clients will be informed about the change from November 2025 via their annual statements.
- https://www.mandg.com/investments/institutional/en-gb/insights/2025/q4/mac-na-na-insuring-the-future-the-case-for-diversified-private-credit – Private credit has rapidly become a more important component within insurers’ investment strategies. The trend among institutional investors to diversify their fixed income exposure has fuelled the growth in the asset class. Despite its relatively short 25-year existence, it is estimated that by 2023 it had grown to a $1.6 trillion asset class globally and is set to grow a further 80% within the next 5 years. According to a recent Moody’s Survey, in 2024, European life insurers allocated 13% (€500 billion) of assets to private credit, although this figure varies significantly between the UK and continental Europe. In the UK, which offers non-surrenderable annuity products, the allocation is higher at 18%, a figure likely to rise further due to the growth in the UK bulk annuity market. With only a 10% allocation to private credit, continental European life insurers have a lower allocation relative to the UK, principally due to their focus on liquid savings products and profit share mechanisms.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/4/fast-european-private-credit-fundraising-us-private-equity-aum-tops-3-trillion-88276413 – Accelerating economic growth across the European Union boosted Europe-focused private credit fundraising in early 2025. Private credit funds targeting European deals raised $25.71 billion this year through March 20, more than two and a half times the $9.27 billion fundraising total for US-focused private credit funds, according to an S&P Global Market Intelligence analysis of Preqin Pro data. Europe-focused private credit funds have consistently outraised their US-focused counterparts annually since at least 2020, but they have gotten off to a remarkably fast start in 2025, accumulating 55% of their 2024 fundraising total in less than three months. Investors may be anticipating an uptick in deployment opportunities after EU GDP in the second half of 2024 grew at its fastest pace in two years.
- https://www.spglobal.com/en/press/press-release/all-eyes-on-europe-as-cracks-emerge-in-private-credit – European private credit had a breakout year in 2025, with fundraising hitting a record €56bn ($66bn) through the first nine months of the year – 17% higher than 2024’s full-year total of €48bn ($56bn). European funds accounted for 35% of all private debt fundraising in the first nine months of 2025 – up from roughly 24% in each of 2023 and 2024. This surge in European private credit fundraising is attributed to accelerating economic growth across the European Union, which has boosted investor confidence and deployment opportunities. The increased fundraising indicates a growing appetite for private credit investments in Europe, reflecting a shift in investor preferences towards alternative assets.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/11/private-credit-gains-ground-among-top-private-equity-managers-94290783 – Private credit is increasingly becoming a larger share of total assets under management for major private equity firms. The AUM of private credit assets is expected to nearly double to $4.504 trillion in 2030 from an estimated $2.280 trillion in 2025, according to a report by Preqin. Blackstone Inc.’s credit and insurance segment grew 18% to $375.50 billion in 2024 from $318.9 billion in 2023. As of the third quarter of 2025, this segment’s AUM stood at $432.30 billion. Credit and insurance grew to comprise 33% of the firm’s total AUM in 2024 from 31% in 2023. The firm’s private equity segment, on the other hand, comprised 31% of total AUM in 2024, up from 29% in 2023. This growth reflects the increasing importance of private credit in the investment strategies of leading private equity firms.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The article was published on March 4, 2026, and presents new information regarding UK insurers’ plans to invest £350bn into private credit. No evidence of prior publication or recycled content was found.
Quotes check
Score:
8
Notes:
The direct quotes from Michael Eakins, Chief Investment Officer at Standard Life, are unique to this article. However, the absence of independent verification for these quotes raises some concerns about their authenticity.
Source reliability
Score:
6
Notes:
Alternative Credit Investor is a niche publication focusing on alternative credit markets. While it provides specialised insights, its limited reach and potential biases may affect the reliability of the information presented.
Plausibility check
Score:
7
Notes:
The claims about UK insurers investing £350bn into private credit align with industry trends and previous reports. However, the lack of corroboration from other reputable sources and the absence of specific details about the insurers involved reduce the overall credibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents new information about UK insurers’ plans to invest £350bn into private credit. However, the reliance on a single, niche source without independent verification, the absence of corroboration from other reputable outlets, and the lack of specific details about the insurers involved raise significant concerns about the accuracy and reliability of the information. Given these issues, the content cannot be covered under our standard editorial indemnity.