Last year marked a period of ‘radical decline’ in the redress paid to those wrongly advised to transfer out of DB schemes, with the majority of members now receiving nothing at all.
Broadstone’s DB redress tracker provides an indicator of the level of compensation due to those who have been mis-advised on their DB benefits.
Over the past four years the redress payable has fallen substantially, and over the last 12 months this has decline to such an extent that no redress is payable at all in many cases. This is because members are deemed to be better off as a result of the transfer out of the DB schemes due to a combination of buoyant investment returns and higher annuity rates.
In Q1 2022, the typical redress due stood at £165,000. This fell to around minus £16,000 at the start of 2025, and then to minus £41,000 at the start of this year.
Key indicators that suggest redress is more likely on individual cases include a high “critical yield” at the point of transfer, poor investment performance post-transfer, younger age at transfer, or older cases, particularly those dating back to before 2010.
Broadstone senior consultant and actuary Simon Robinson says: “The average level of DB transfer redress remains historically low and means that most cases will still show ‘no loss’ at the beginning of 2026.
“Despite this, we are still seeing many cases where compensation is due. A high critical yield at the time of transfer is often a warning sign that a claim will arise and redress become payable.
“Firms should review their historic transfer business to identify any cases of particular concern.”
