If your scheme's trustees insure your pension with Legal & General, a buy-in leaves the scheme paying you; a buyout makes L&G your direct payer.
A Legal & General pension risk transfer is a decision for the trustees of a defined benefit (final salary) scheme, not its members, but the letter lands with you. Trying to work out what an insurer letter from your scheme means for retirement? An FCA-authorised adviser will cover your own position by phone if you submit this page's brief form; it costs nothing.
How Legal & General pension risk transfer works: buy-in first, buyout later
The difference between the two stages is who owes you the pension. Under a buy-in, L&G's privacy notice for scheme members (last updated June 2026) says the trustee bought a policy that pays money to the trustee, who in turn pays you: "We sometimes provide pension administration and payroll services but the trustee is always legally responsible for paying your monthly pension benefits." At this first stage, in L&G's words: "Most schemes will first move to buy-in and we have no direct relationship with you at this stage."
A buyout moves that responsibility. L&G's buyout page, read on 3 November 2026, says: "All buyouts initially begin as buy-ins." Its stages run from the trustees paying a premium, through a data cleanse by the scheme and its advisers while the buyout still operates as a buy-in, to L&G paying members directly once they have their policies. The privacy notice describes that final step: the buy-in policy is normally converted into individual annuity policies, and "You will become an L&G policyholder and stop being a member of the scheme." L&G says it will write to you at that stage about the new contract, and the trustees can then wind up the scheme.
| Buy-in | Buyout | |
|---|---|---|
| Policy held by | The trustees, as a scheme asset | You, as an individual annuity policy |
| Pays your pension | The scheme | L&G directly |
| Your status | Still a scheme member | L&G policyholder |
Whether your scheme is at the first or second stage will be in the trustees' letter. For the general idea behind both, see what pension risk transfer is.
Will your pension be the same after a Legal & General buyout?
On the benefits themselves, L&G's privacy notice says a buyout "will ensure that your pension benefits are secured and paid as promised, with no change to the benefits that you are legally entitled to." A separate L&G article on buyouts is a little more cautious: "Members usually enjoy exactly the same pension benefits that they were due from their pension scheme, although in some buyouts the scheme is able to enhance members' benefits, and to purchase more pension income for their members from the insurance company." Both are L&G's own descriptions, not the contract. Your policy documents and the trustees' letter decide what applies to you.
The premium is the trustees' to pay, not yours: L&G's buy-in page says it can be paid in cash or by transferring scheme assets. How a spouse's or partner's pension, early retirement or a tax-free lump sum are handled is set out in your own scheme and policy paperwork. An FCA-authorised adviser, contacted at no cost via this page's short form, will go through your L&G letters alongside your retirement plans.
Who do you deal with after a Legal & General buyout?
After a buyout L&G says it takes on administration and pays you directly. In its article on buyouts, the insurer "takes over responsibility for the payment of these pensions and, typically, also the administration and customer service." Your information is then handled separately, under L&G's consumer privacy notice for annuity policyholders, and L&G may share it with the scheme or trustee so they can meet their legal and regulatory responsibilities.
Marketing starts only at this point: "We will only send you marketing information if you have become an L&G policyholder as part of a buyout agreement." Policyholders can opt out at any time, and L&G's Defined Benefits Retirements team, on 0345 077 8778, is the contact the notice gives for questions about your data.
Protection before and after your scheme moves to L&G
Protection depends on the stage. While the scheme still exists, as with a buy-in, GOV.UK says you are "usually protected by the Pension Protection Fund if your employer goes bust and cannot pay your pension." The PPF's frequently asked questions (read 3 November 2026) add that it takes in a scheme only once it has assessed that the scheme cannot afford to buy benefits from an insurer at least equal to what the PPF pays. What it then pays is set out in the Pension Protection Fund explained.
After a buyout your pension is an individual annuity policy with L&G, so the Financial Services Compensation Scheme (FSCS) is the one to ask about. In FSCS's account, pensions from UK-regulated insurers are generally protectable when they qualify as contracts of long-term insurance, an annuity being its common example, yet it cannot confirm whether a particular provider's plan qualifies; that is a question to put to L&G. What happens if an annuity provider goes bust covers what FSCS pays.
Whether final salary pensions are protected goes further into the scheme side.
What else do scheme members ask about Legal & General buy-ins?
Can members choose whether their scheme goes to Legal & General?
No. The trustees make the decision and arrange the policy. If you receive a call or message you did not expect, check it with the trustees first and read the FCA's pension scams page.
Does a Legal & General buyout cover deferred members and dependants?
Usually. L&G's buyout page says a buyout typically covers all members of the scheme, both deferred and current pensioners, and that L&G pays benefits directly to members, including any additional benefits for dependants. What your dependants would receive is set out in your own policy; what a final salary pension is explains the usual rights.
Who bought Legal & General pensions?
ReAssure took on one part of the business: L&G's older insurance-based pensions and savings moved there in September 2020, as what happened when L&G pensions moved to ReAssure explains. That move is separate from L&G insuring company schemes, which is what this page covers.
Is this the same as my Legal & General personal pension?
No. Those are products you buy yourself; whether a Legal & General pension is good covers them. Other insurers also take on schemes, such as Pension Insurance Corporation.
Who can help me weigh up the letter?
Your savings, State Pension and family all bear on how an insured pension fits your plans. An FCA-authorised adviser phones you after you submit the brief form here; there is no fee.