The average time to buyout for a FTSE350 defined benefit (DB) pension scheme fell to an all-time low of 3.6 years in May 2025, according to Barnett Waddingham’s DB End Gauge Index.

This marked a reduction compared with the four-year timeframe reported in April 2025.

The consultancy’s analysis comes as the PPF 7800 Index for May showed a robust DB sector, even against the backdrop of market volatility and uncertainty.

Commenting on the shift to shorter buyout times, Barnett Waddingham partner, Lewys Curteis, said: “BW’s DB End Gauge index fell as a result of an increase in average swap and bond yields, which improved scheme funding levels. The fall in the index was slightly tempered by a more cautious outlook for future investment returns.”

He added: “The fall in the index illustrates the continued strength of DB pension scheme finances, and the proximity of most schemes to reaching full funding on a buyout basis, if they are not already there.”

Curteis said it was time for companies to consider the right pathway, particularly in light of the government’s move to increasing flexibility for BD schemes.

He commented: “Companies and trustees should be properly assessing the relative merits of running on versus an immediate buyout in terms of the economic value that could be generated for companies and members, particularly given the surplus extraction relaxations being proposed by government.”

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