Defined benefit (DB) pension transfer redress payments are expected to remain at historically low levels in the first quarter of 2026, according to First Actuarial.
According to the firm, advisers got a break in December 2025 when the FCA decided firms would not need to hold extra capital or meet new reporting rules for these payments.
The First Actuarial Redress Tracker, updated to 1 January 2026, uses market conditions from the start of the year to calculate redress. Any assessments done before April will be based on these January conditions.
The tracker estimates total redress by looking at a typical mix of cases, including different schemes, times and member ages and assumes the transferred money was invested in a spread of assets.
First Actuarial head of redress services Sarah Abraham says: “Our modelling continues to show that the vast majority of consumers will not have suffered a loss as a result of transferring out their DB pension. As a result, they will not be due any redress. Overall, therefore, redress payments will remain low despite recent market shifts that will slightly increase the compensation due to those people who did suffer a loss.
“The FCA recognises how important it is to prevent firms from walking away from their redress liabilities, and has issued several communications to support this objective. Although the proposal to explicitly set aside capital for redress will not be implemented, firms will still have to comply with this ‘polluter pays’ guidance, and may therefore want to understand their potential exposure to redress payments.
“We continue to see M&A due diligence processes identifying the risk of future redress payments arising from pensions transfer advice. Firms looking for a purchase should therefore take a close look at their book of transfer advice. And firms should consider Defined Contribution transfer advice as well as DB, because we continue to see compensation being required in relation to the former”.
