Thousands of bereaved families could be entitled to compensation from NS&I after an operational error caused some savings accounts belonging to deceased customers to be missed. NS&I has identified around 30,300 affected families, with a total of £181.9 million potentially owed.
NS&I Has Contacted Fewer Than 800 Families So Far
The state-owned savings provider began contacting affected families in May. So far, just 795 of the 15,600 families eligible for proactive compensation have been contacted, according to MoneySavingExpert.com.
NS&I expects the repayment process to continue into the first half of 2027 as it works to trace the families concerned. The issue was raised in Parliament earlier this year and led to the resignation of NS&I chief executive Dax Harkins.
Average Payout Is More Than £5,400
The average repayment made so far stands at £5,486. One family has received the largest payment to date, worth £269,225. Across the affected accounts, NS&I estimates that around £181.9 million is owed.
The amount each family receives will depend on the savings that were missed and the interest due.
Some Families Will Not Receive A Letter
NS&I is proactively contacting families owed more than £10. Those owed less than £10 will not receive a letter automatically. Instead, they must contact NS&I directly to request the money.
Anyone who believes a deceased relative may have been affected but has not received correspondence can contact the NS&I general helpline on 0800 092 1286.
How The NS&I Payments Will Be Made
Payments will be sent by warrant, which works in the same way as a cheque. NS&I says the payment should arrive within 15 working days of the first letter. Families will receive the original amount that was owed along with an additional interest payment linked to the delay.
NS&I will pay whichever is higher between the interest that would have accumulated since the error occurred and the Bank of England base rate plus 1%.
Compensation Will Not Face Income Or Inheritance Tax
Pensions minister Torsten Bell has confirmed that the late payments will be exempt from Income Tax and Inheritance Tax. This means families receiving compensation will not have those taxes deducted from the repayment.
The tax treatment applies to the payments arising from the NS&I error.
What Bereaved Families Should Do
Anyone who believes a deceased family member held savings with NS&I and may have been affected can contact the provider directly. Families that have already received a letter should follow the instructions provided by NS&I to arrange their repayment.
Those who have not been contacted but believe they may qualify can call the NS&I helpline on 0800 092 1286. NS&I’s tracing process is expected to continue through 2027, with the provider working to identify the remaining affected families and return the money owed to them.
