NS&I to pay £367 million to bereaved families after failing to trace savings – here's what you need to know

NS&I owes £367 million to 34,000 families

In March, pensions minister Torsten Bell MP told the House of Commons that NS&I had notified the Treasury of an "operational failure" to properly trace the savings accounts of some customers who had passed away. NS&I chief executive Dax Harkins resigned as a result of the error.

At the time, NS&I estimated that as much as £476 milion had been mistakenly withheld from families, with 37,500 estates affected. Now, following a full review, NS&I has revised that figure down to a total value of £367 million with 34,000 estates affected.

On Tuesday 19 May, NS&I published its plan on how and when those affected will receive what they're owed, plus what compensation will be paid on top.

Affected estates will begin to be contacted from Monday 25 May

NS&I will start contacting affected estates with holdings of £10 or more from the week of 25 May 2026 onwards. Those affected will get a letter explaining what has happened and confirming the amount the estate will be repaid, plus the interest payable (see below for more on this).

The letter will also explain how the estate can reclaim any additional legal costs or administrative fees it incurs, as well as including a dedicated telephone number for any queries.

NS&I wouldn't tell us how much payments will be worth on average.

It's unclear what's happening to estates with holdings worth less than £10 – we've asked NS&I and we'll update this story.

Letters will be sent in weekly batches, with payments made "soon after"

NS&I hasn't told us how many payments will be made in each phase, but it said it expects to complete the whole process by the first half of 2027.

Payments will be made by warrant, which works in the same way as a cheque.

We've asked how long it will take after receiving a letter to get your payment, and we will update this story if we hear anything more.

Not heard anything? Contact NS&I

NS&I says it is working with "specialist data search providers" to trace the correct address and contact details for everyone affected. It says that where this isn't possible, it will continue to hold the funds and these will continue to accrue interest until the individual gets in touch.

So if you think you're affected and don't hear anything, you should contact NS&I's general helpline on 0800 092 1286.

You'll get back what you're owed, plus interest on top

NS&I has confirmed that, when repaying the money, it will also add the higher of: the interest accrued since the error occurred, OR the Bank of England base rate, currently 3.75%, plus one percentage point (so 4.75% at present).

The savings provider says it is aware that some may incur additional professional services costs, such as legal or administration fees, as a result of receiving an unexpected payment. It said it will provide details on how to request reimbursement for these costs within the letters sent to those affected, and will review each request on a "case-by-case basis".

All payments will be exempt from Inheritance and Income Tax

Pensions minister Torsten Bell MP confirmed to the House of Commons on Tuesday 19 May that all payments owed will be exempt from Inheritance Tax.

In addition, any interest accrued on holdings before death or during the administration period – the period from the person's death to when the estate is settled – will also be exempt from Income Tax.