Final Update – FCA Announcement

The FCA has recently published (as of the 26 March 2021) updated guidance for firms to calculate redress for unsuitable defined benefit pension transfers (see FG17/9: Guidance for firms on how to calculate redress for unsuitable defined benefit pension transfers (  The updated guidance is backdated to 1 January 2021. 

This is the (long awaited) change in the RPI-CPI differential as a result of changes to RPI inflation announced in November 2020 and expected to come into effect in February 2030.   

The previous approach to determine CPI was a simple deduction of 1% from the RPI rate for all applicable tenors.  Now the FCA has modified this approach (as result of analysis and recommendation by PriceWaterhouseCooper LLP but without consultation with the wider market) and adopted a “matrix” approach which sets the RPI-CPI differential according to the term to retirement and retirement age of the member. 

Congruent will be updating its calculations platform Congruent Calculations™ to take into account the new methodology.