Thousands of bereaved families owed average £5,400 payout after NS&I error

An estimated 30,300 families are owed a combined £181.9million after the state-owned savings provider failed to identify accounts belonging to customers who had died.

NS&I has confirmed that an operational error caused the problem, which was first disclosed in the House of Commons earlier in 2026.

Letters to affected families only began going out in May, and repayments are not expected to be completed until the middle of 2027.

Just 795 families have been contacted so far out of the 15,600 NS&I plans to approach directly, according to MoneySavingExpert.com.

Families who have received repayments have been paid an average of £5,486 each. The largest single repayment was £269,225.

NS&I is writing to the 15,600 households owed more than £10 to arrange refunds.

However, the remaining 14,700 families are owed smaller amounts and will need to contact the savings provider themselves.

The error also led to the resignation of NS&I chief executive Dax Harkins.

Affected families will receive the missing savings plus interest to compensate for the delay.

NS&I has said it will pay whichever is greater: the interest that has built up since the error occurred, or an amount based on the current Bank of England base rate plus one percentage point.

Repayments are sent as a warrant, which works like a cheque. These should arrive within 15 working days of NS&I sending the initial letter.

Pensions Minister Torsten Bell confirmed to the House of Commons on 19 May that all repayments will be fully exempt from both Inheritance Tax and Income Tax.

To locate everyone entitled to money, NS&I is working with specialist data search providers to trace correct addresses and contact details.

Where tracing proves impossible, the bank has said it will hold the funds and continue to add interest until the individual comes forward.

Families owed less than £10 will not be contacted by NS&I and must get in touch with the bank directly to claim what they are due.

Anyone who believes they may be affected and has not yet heard from NS&I is urged to call the general helpline on 0800 092 1286.

The bank has also acknowledged that some families may face unexpected legal or administrative costs as a result of receiving a late payment.

NS&I will include details in its letters explaining how to request reimbursement for such expenses, with each claim assessed on a case-by-case basis.

With repayments not due to be completed until mid-2027, thousands of families face months more waiting before they receive money that should have been paid long ago.