Sarah Abraham, Head of Pensions Redress team at First Actuarial, says: “During March we saw a great deal of variance in redress from one day to the next. The FCA has prescribed the use of a specific methodology for Defined Benefit transfer redress calculations. That methodology is highly sensitive to prevailing market conditions at the effective date of the calculation. In the current volatile market conditions, the redress due will depend considerably on the specific date used.”
The FCA rules require redress to be based on market conditions and asset valuations applying on the first day of the quarter, so the amount of payments that will be made in Q2 2026 is now known. First Actuarial’s calculations show that the overall exposure to redress on a typical portfolio of Defined Benefit transfer advice is only slightly higher in Q2 2026 than it was in Q1.
The muted impact of market changes on the redress applying to a book of pensions transfer advice reflects the ‘no redress required’ results that most Defined Benefit loss calculations are still returning. However, redress volatility remains a concern for those firms that wrote pensions transfer advice some time ago.
Sarah explains: “In general, where transfer advice was given in the 1990s and 2000s, and is subsequently found to be unsuitable, the FCA’s methodology will result in a requirement for the firm to pay compensation. And it’s these cases where redress really jumped around during March. Market conditions on the crucial quarter-end date have become something of a ‘lucky dip’.”
With no end in sight to market volatility, uncertainties around redress payments will likely persist in the current period.
The First Actuarial Redress Tracker, now updated to 1 April 2026, models the aggregate redress for a portfolio of notional cases. The notional portfolio reflects redress in relation to transfers from a variety of schemes, with a range of transfer dates and consumer ages. Allowance is made for transfer proceeds to have been invested in a mixed portfolio of assets.
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