Underpaid final bonus on Endowment policy

MarmaladeSandwiches

I had a Low Cost Homebuyers Plan which matured in 2017. I have just had a letter from the provider informing me that the amount of the final bonus they applied was too low, apologising and informing me I am due an additional policy value of £658. This was obviously a nice surprise but I am very annoyed that the added interest they have offered me is only £119. They have had money that was mine for over 7 years and I do not consider this to be a fair amount. I have contacted them stating as such and have invited them to make a further offer or I will be going to the Ombudsman. My question is, what would be a fair amount? I have seen some cases where 8% a year interest has been suggested which is obviously a lot more than £119. Should inflation also be taken into account? Any advice would be gratefully received. 

GrumpyDil

8% per year generally relates to court ordered payments.

I suspect that your interest payment has been calculated based on BoE base rate, maybe with an adjustment. 

Best option would be to ask them how the interest element was calculated and go from there. 

dunstonh

 This was obviously a nice surprise but I am very annoyed that the added interest they have offered me is only £119. 

Most of that 7 years had interest at under 1%.  So, why do you think you should get more?

 I have contacted them stating as such and have invited them to make a further offer or I will be going to the Ombudsman.

Which they wont care about as the big firms pay a fixed fee for the FOS costs and not a case fee.

 My question is, what would be a fair amount?

£119.
The key question is why you think it is unfair but then come to us to ask what would be fair.

 I have seen some cases where 8% a year interest has been suggested which is obviously a lot more than £119. 

8% is statutory interest. That is used in misselling or legal cases.

 Should inflation also be taken into account?

no.