The bond sell-off is being reported as a squeeze: borrowers pay more, refinancing gets harder, long yields print fresh highs on inflation fears. That is true for anyone who needs to issue. It is the opposite of true for the roughly 1.4 trillion pounds of liabilities sitting in Britain's closed defined benefit pension schemes, and for the handful of insurers licensed to take them off trustees' hands.
The reason is a pricing convention rather than a sentiment shift. An insurer quoting a bulk purchase annuity does not price off a scheme's actuarial technical provisions; it prices the premium as a spread over long gilt yields, using the credit spread it expects to earn on the assets backing those annuities. When long yields and credit spreads rise together, the quoted premium falls. A modern UK scheme is heavily hedged after 2022, so its assets fall too, but a buyout quote is a shorter, more convex claim on rates than a scheme's mixed asset pool. The practical result reported by trustees in every high-rate episode since 2022 is the same: the gap between what the scheme holds and what the insurer charges narrows, and schemes that were three years from affordability find they are affordable now.