Compensation for a typical defined benefit (DB) pension transfer redress case continued to fall through Q1 2025, as a result of financial conditions softening and rates rising, Broadstone's DB redress tracker has revealed.

The trackers showed that compensation for a typical pension transfer redress case dropped from around -£16,500 at the end of 2024 to -£26,000 at the end of June,

Due to declining DB transfer compensation, Broadstone said that claims management companies (CMCs) were beginning to target advisers for DB redress claims far less, instead pivoting towards more lucrative areas within the financial services industry where there are instances of ‘secret commission’.

This includes motor finance, although the Financial Conduct Authority (FCA) has been clear that consumers should wait for the regulator-administered redress scheme, should that be deemed necessary following this month's Supreme Court judgment.

Other areas that are seeing increased activity from CMCs include the mis-selling of defined contribution (DC) pension scheme opt-outs, a continued focus on free-standing additional voluntary contribution (AVC) mis-selling, and personal loan or credit card affordability redress.

Broadstone head of redress solutions, Brian Nimmo, noted that while the average level of DB transfer redress remained “historically low” and has fallen further in the first half of 2025, we’re still seeing many cases where compensation is due.

“This is particularly in cases where transfer values were low or where investment performance has been poor. It reinforces the importance of claimants and their advisers reviewing each case on its own merits,” he continued.

“However, as this area of compensation has become less lucrative, we are seeing a shift in the CMC market as they pivot towards sectors where the compensation dynamics differ, and we typically see redress being paid in most cases.

Nimmo stressed that motor finance redress remained a “highly scrutinised” area as we await the Supreme Court’s ruling.

“Consumers have been warned to wait for the FCA-run compensation scheme, should one be necessary, rather than using CMCs, but this is still likely to be an area they target,” he added.

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