The average time to buyout for FTSE 350 companies’ defined benefit (DB) pension schemes fell from 5.7 years at the end of 2023 to 5.1 years at the end of February 2024, analysis from Barnett Waddingham has found.

The group’s DB End Gauge index showed that the average time to buyout fell after an increase in average swap rates and bond yields and positive growth asset returns over the month of February.

Commenting on the shift, Barnett Waddingham principal, Lewys Curteis, said: “The spike in bond prices towards the end of 2023 put downwards pressure on DB scheme funding levels.

"However, this fall in yields all but reversed over the first couple of months of 2024, pushing DB scheme funding levels back to record highs.

“This is reflected in our DB End Gauge index, which showed the average time to buyout for the FTSE350 companies falling by around half a year over the period between 31 December 2023 and 29 February 2024.”

The DB End Gauge is calculated using publicly available data collected from the annual accounts of the FTSE 350 companies.

It covers around 150 companies with DB pension arrangements and is calculated as the average of the estimated time to reach buyout funding for each scheme.

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