Peers have often been promoted by being granted another peerage with a higher rank.
In some cases, a peerage can be inherited by someone who already holds another peerage title.
So a number of peers have accumulated several different peerage titles with the same or different ranks.
Edmund Mortimer of Wigmore was created Baron Mortimer of Wigmore by being summoned to Parliament in 1295. His son Roger Mortimer, the second baron, became the lover of Queen Isabella. They gathered an army in France and invaded England in 1327. They forced King Edward II to abdicate in favor of his and Isabella's young son Edward III. Isabella became the official regent for her son, but Roger Mortimer was promoted to Earl of March and really ran the government. It was announced that he ex king Edward I died "of natural causes" while imprisoned, but he was commonly believed to have been murdered.
So it is not surprising that young Edward III overthrew Mortimer a few years later. Mortimer's property and titles were forfeited and Mortimer was exceuted.
The second time, it was created as a re-grant; The son of the 1st Earl of March, Edmund de Mortimer, was summoned to parliament on 20 November 1331. The second baron of this creation became Earl of March in 1354 upon the reversal of the attainder. The two titles then merged. The barony either merged in crown in 1461 or became extinct in 1425.
Thee are other examples of attainders being reversed and the heirs of executed nobles getting some or all of their property and titles back.
And I think that examples could be found of the son or grandson of an executed noble getting back a lesser title but not a higher title. So that could be considered a demotion in peerage rank. But that not would not be a demotion in rank for a single noble, but a demotion for different generations of the noble family.
Something which almost fits the definition of a demotion happened to a Duke of Norfolk.
Thomas Howard, the third Duke, fell out of favour with the dying Henry and was attainted on 27 January 1547; he was stripped of his titles and his lands reverted to the Crown. Imprisoned in the Tower of London, he narrowly escaped execution through Henry's death the following day, but remained imprisoned until the death of Edward VI and the accession of the Catholic Queen Mary to the English throne in 1553, upon which his lands and titles were restored to him.
But Queen Mary I restored him to his dukedom, so he can't be considered to have been demoted in peerage rank. And his survival for so long after being attainted and condemned to death was a rare miracle, so I doubt if any British noble was ever stripped of their rank and then restored to favor and given a lesser noble rank.
An expert on the subject might be able to think of an example.