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The UK pensions' buyout market will have to rise by a capacity of £250bn in the next three years to meet current trustee demand for offloading liabilities, a pensions solutions provider has claimed.

The study from the Pension Corporation, which echoes a recent poll by Hymans Robertson in revealing that nearly a third of trustees expected their scheme to be bought out within the next decade, said the new capacity signifies an increase of more than 80 times the aggregate value of pensions' buyout transactions in 2007.

Edmund Truell, chief executive of the Pensions Corporation, said: "These estimates from both Hymans Robertson and ourselves reaffirm the immense growth potential inherent in the pension solutions sector."

The poll undertaken by Pension Insurance Corporation, the group's insurance company, estimated £30bn of additional solvency capital will be required to underpin buyout demand.

The company predicted the current capacity of the pensions' buyout market could accommodate up to another £25bn of buyout transactions, significantly less than the demand expressed by trustees.

Mr Truell said: "We are confident that Pension Insurance Corporation is well placed to help trustees secure their members’ benefits."

The last two years has seen an explosion of activity in the pension insurance market with £2.9bn of insurance deals transacted in 2007 and £5bn in the first half of 2008.

The group argued that by the end of this year, the total could surpass £10bn.

It claims that its joint sponsorship of more than £4.5bn of pension liabilities with Citibank, in the corporate deals market, and insurer to insurer bulk annuity transfers totalling more than £10bn have also absorbed substantial capacity.

Amarendra Swarup, a senior quantitative analyst for the Pensions Corporation, said: "At present, buyout liabilities for the private sector are about £1.2 trillion. If 31 per cent of these transact in the next decade, nearly £350bn of additional capacity will need to be found by the industry."

The group said the pension industry is witnessing a paradigm shift where buyouts are the obvious way for trustees and sponsors to take risk off the balance sheet and secure members' benefits.

David Thurlow, director of Newmarket-based IFA Atkinson Bolton Consulting, said: "I am not surprised by the findings.

"Historically, demand has been low because the prices were too high. One of the fortunate effects of the credit crunch is that it has brought prices down therefore demand has picked-up again. "