Compensation levels for claimants who were wrongfully advised to transfer out of their DB pension have continued to fall from their historically low levels, prompting claims management companies to shift their attention.
The latest quarterly DB Redress Tracker from financial services consultancy Broadstone shows that compensation for a typical pension transfer redress case continued to fall through the first half of 2025, dropping from around -£16,500 at the end of 2024 to around -£26,000 at the end of June.
As such, claims management companies are turning to more lucrative areas of the financial services industry, according to Broadstone. These include the mis-selling of DC pension scheme opt-outs and free-standing AVCs, personal loan or credit card affordability redress, and motor finance, which has recently been under scrutiny for hidden commissions.
Brian Nimmo, head of redress solutions at Broadstone, said: “While the average level of DB transfer redress remains historically low and has fallen further in the first half of 2025, we’re still seeing many cases where compensation is due. It reinforces the importance of claimants and their advisers reviewing each case on its own merits.
“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 of the cases.”
He added: “Motor finance redress remains 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.”
