Unstable UK market conditions have turned defined benefit (DB) transfer redress calculations into a “lucky dip”, according to analysis from First Actuarial.

The firm found that volatility during March could have led to daily variations of between 5 and 10 per cent in pension redress calculations, driven by the sensitivity of the Financial Conduct Authority (FCA)’s prescribed methodology to prevailing market conditions.

The latest data from the First Actuarial Redress Tracker, updated to 1 April 2026, illustrated the broader trend of declining redress levels over time, with aggregate redress as a percentage of transfer values falling significantly from peaks above 35 per cent in 2021-2022 to low single digits in 2025 and early 2026.

The tracker models a notional portfolio of DB transfer cases, incorporating a range of transfer dates, member profiles and investment outcomes.

First Actuarial head of pensions redress team, Sarah Abraham, commented on the findings: “During March, we saw a great deal of variance in redress from one day to the next. The FCA has prescribed a specific methodology for DB 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.”

Under FCA rules, redress must be calculated using market conditions and asset valuations on the first day of the relevant quarter, meaning the level of payments due in Q2 2026 is now fixed.

Despite recent volatility, First Actuarial noted that overall exposure to redress for a typical portfolio of DB transfer advice was only slightly higher in Q2 2026 compared to Q1.

The firm attributed this relatively muted impact to the continued prevalence of “no redress required” outcomes across many DB transfer cases, reflecting the ongoing trend of lower compensation levels.

However, volatility remained a significant issue for firms dealing with historic transfer advice, particularly from the 1990s and 2000s.

Abraham added: “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’.”

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