NS&I to pay compensation to bereaved families over account tracing failures – what we know so far

In the House of Commons on Thursday 26 March, pensions minister Torsten Bell MP said NS&I had notified the Treasury of an "operational failure" to properly trace the savings accounts of some customers who had passed away.

Mr Bell said current estimates indicate around 37,500 bereavement claims have been impacted, covering savings worth up to £476 million – but work to identify those affected is still "ongoing", so the true scale of the issues isn't yet certain.

NS&I says the errors arose because its search process "failed to identify all NS&I products", and has apologised. Meanwhile, NS&I chief executive Dax Harkins has resigned and is to be replaced by former HM Revenue and Customs boss Sir Jim Harra, in what Mr Bell described as a "fresh start".

It's not yet clear how or when compensation will be paid

In his statement to the Commons, Mr Bell said that the affected families should have their funds returned to them, including interest and compensation.

NS&I says it is "working hard to ensure everybody affected is paid what is owed to them", adding that it will ensure "customers' estates are appropriately compensated".

However, we don't yet know how this will work in practice, including how and when compensation will be paid or the amount of interest you'll get.

NS&I will contact you directly if you're affected – but you can still complain

In a statement, NS&I said that those affected don't need to take any action right now, as it will proactively contact people. Separately, Mr Bell warned that "there is no need for individuals to waste money on a claims management company or solicitor".

Further details on how the compensation scheme will work will be published in May this year. We've asked NS&I for the exact date and will update this story when we know more.

In the meantime, if you've experienced any problems tracing accounts, you can still complain to NS&I directly by calling it on 0800 092 1286 or in writing. If you aren't happy with its response (or don't get one within eight weeks), you can then escalate your complaint to the free, independent Financial Ombudsman Service.