The average time to buyout for FTSE 350 defined benefit (DB) pension schemes has remained stable at 5.4 years as of 31 August, Barnett Waddingham’s DB End Gauge Index has found.

The monthly index revealed that the average time to buyout remained unchanged in August, ending the trend of gradual increases observed over the past four months.

Barnett Waddingham attributed the lack of change in the DB End Gauge Index to the fact that financial market conditions have remained broadly stable over the last month.

The index previously rose to 5.4 years in July, due to a decline in average swap and bond yield, which led to higher liability values and a more cautious outlook for future investment returns.

The average time to buyout has fluctuated over the past 12 months, reaching a high of 5.7 years in December 2023 due to a decrease in average swap rates and bond yields, and a low of 4.7 years in April following a further improvement in funding levels.

The End Gauge index provides an estimate of the average time for UK pension schemes to reach a sufficient level of funding to buyout their liabilities with an insurance company.

Changes in the index over time illustrate the positive and negative impacts of various factors on pension scheme journeys and underscore the need for a strategy that includes monitoring and trigger points for actions to ensure that schemes remain on course for their endgame.

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