The average time to buyout for FTSE350 defined benefit (DB) pension schemes fell to 5.2 years at the end of October, marking the biggest monthly drop seen since February, analysis from Barnett Waddingham has revealed.

The index showed that rises in gilt yields pushed the average time to buyout for FTSE350 DB schemes from 5.7 years at the end of September to 5.2 years as at 31 October 2024.

Barnett Waddingham partner and head of employer DB consulting, Simon Taylor, explained: "Throughout October and on the lead up to the Autumn Budget, gilt yields and swap rates were on the rise.

"This reflected concerns of fiscal rule changes and increased government expenditure, borne out during the Chancellor’s delivery of Labour’s borrowing plans.

"Rates continued to rise post Budget, with the 15-year gilt yield sitting at 4.80 per cent at 31 October 2024, up from 4.45 per cent at the end of September.

“This contributed to a decrease in the DB End Gauge index of 6 months – the biggest monthly drop seen since February - despite an offsetting impact of a rise in expectations for future inflation and poor asset returns over the month.

“The DB End Gauge index offers valuable insights into pension scheme journeys, highlighting the importance of robust strategies with monitoring and trigger points.”

---