Compensation payments due to people who were wrongly advised to transfer out of their defined benefit (DB) pensions are expected to fall further in Q4 2026 amid rising bond yields, according to Broadstone’s DB Redress Tracker.

The quarterly tracker provides an indication of the level of compensation due to people who were ill-advised to transfer out of their DB pension.

The Q4 update found that a gain was expected in most cases, with the central estimate being around £65,000 compared to approximately £59,000 in Q3 2026.

In cases of a gain, no redress would be payable as the consumer is judged to be better off because of transferring.

Broadstone said the small increase in gain between Q3 and Q4 has largely been caused by rising bond yields through the third quarter, which has reduced the value of the DB liabilities given up.

The firm added that typical investment returns on the receiving personal pension plans were very small and so had a broadly neutral impact on the gain.

However, Broadstone noted that some members may still be entitled to redress, particularly where transfers took place longer ago or investment returns have been poor.

The tracker follows an illustrative case of an individual who left their scheme in 2018 aged 50, with a £10,000 annual pension, receiving inflation-linked increases when in payment.

The range of outcomes has been updated to reflect the largest gains and losses across a notional portfolio of cases.

Developed in line with Financial Conduct Authority (FCA) rules, the tracker assumes individuals invested their funds to achieve returns in line with the FTSE UK Private Investor Income Total Return Index.

Broadstone senior consultant and actuary in the insurance advisory and remediation division, Simon Robinson, said: “Market changes through the quarter are estimated to have driven redress amounts even lower in Q4 2026 than they have been previously, following the sustained downward trend over the last couple of years.

"Increased bond yields have been the primary driver over the last three months."

Discussing what may happen going forward, Robinson said it is “impossible to second guess” how redress will look in future quarters.

He explained: “We can see short-term inflationary pressures, which would increase redress levels, but these could be accompanied by higher bond yields offsetting the impact. Future investment returns in equity markets are hugely uncertain and could well be quite volatile.

“Where this could give rise to peculiar results is that redress calculated in any quarter is based on market conditions and asset values at the end of the previous quarter.

“This has the benefit of stability over a three-month period and reduces the ability for either party to cherry pick valuation dates but could mean redress offers made are quite out of date with reality at the point the offer is made.”

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