Compensation for a typical pension transfer redress case continued to fall in the fourth quarter, with many claimants now receiving no compensation, according to a new report.

Compensation payments fell in the fourth quarter of 2024 as gilt yields rose, decreasing the assessed value of the transferred DB liabilities, while asset values rose further.

The report from Broadstone showed that the majority of new pension transfer claims would not see any redress payable. The consultancy’s Redress Tracker shows a rapid decline in potential DB redress since the start of 2022 when the average compensation was above £150,000.

The Broadstone DB Redress Tracker follows the example of an individual who left their scheme in 2018 aged 50, with a pension of £10,000 per year which would receive inflation-linked increases when in payment. The Tracker is developed in line with FCA rules for calculating redress with the individual assumed to have invested their funds to earn returns in line with the FTSE Private Investor Index.

Brian Nimmo, head of redress solutions at Broadstone, said: “There will now be many cases where no loss is experienced for those transferring out of their DB pension due to effective investment performance and the size of the original transfer value.

"As our Redress Tracker demonstrates, this is a radically difficult scenario from just a couple of years ago when our average complainant could have been entitled to over a hundred thousand pounds.

“However, it is also true that many individuals still face losses requiring redress and, with the potential requirements of CP23/24 coming down the line, it is important that financial advisers are preparing appropriately. This is likely to require expert, specialist advice and actuarial support to help them scope out how much capital is needed to be set aside for possible claims.”