NS&I to start contacting bereaved families following missing savings blunder
Treasury-backed savings giant NS&I will start contacting the estates of deceased customers next week as it prepares to pay out hundreds of millions of pounds after failures meant that bereaved families were missing out on savings pots.
The savings and Premium Bonds provider, which describes itself as the UK government savings bank, will contact all affected estates with holdings of £10 or more to reunite them with the full value of funds that should have been returned to them earlier.
In March, NS&I estimated that around 37,500 bereavement claims with a total value of £476 million may have been affected.
On Tuesday it said that as the review has progressed, this number has reduced and is likely to reduce further.
NS&I’s current assessment is that up to 34,000 estates with a total value of around £367 million have been affected.
Affected holdings will be adjusted upwards to include either the higher of the interest accrued since the error occurred, or the Bank of England base rate plus one percentage point, in line with Financial Ombudsman Service (FOS) principles, NS&I said.
It added that support measures for affected estates also include “a full inheritance tax exemption for the holdings of the remediation population affected by the NS&I tracing error which are returned to the estates to which they rightly belong.”
It said that, to further ease the administration of estates, the personal representatives or executors will not be liable for any income tax ordinarily due in their role on interest accrued before death or in the administration period.
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There is nothing that families, beneficiaries or the personal representatives and executors of deceased estates need to do, NS&I said, as it will contact the personal representatives and executors of estates with holdings of £10 or more directly.
Payments to affected estates will run over the coming months and are expected to conclude in the first half of 2027.
NS&I offers a range of savings and investments to more than 24 million customers, including more than 22 million Premium Bonds holders.
As it is backed by the Treasury, money held with it has 100% security.
NS&I notified the Treasury in December of an operational failure to trace accounts comprehensively of some customers who had died.
In March, it emerged that NS&I chief executive Dax Harkins was being replaced by former HM Revenue and Customs (HMRC) boss Sir Jim Harra, in what pensions minister Torsten Bell described as a “fresh start”.
Sir Jim, interim chief executive, NS&I, said on Tuesday: “I apologise to everyone who has been affected by this issue. Beginning the process of repaying these funds is a key step in putting things right.
“We need to ensure that everybody who makes a bereavement claim with NS&I is treated sympathetically and has their case processed as quickly as possible.
“Today, this process is taking longer than it should. We have brought in additional staff to get the service back on track.”
NS&I, which holds more than £240 billion in customer deposits, said the error happened because the search process used when handling a bereavement claim failed to identify all NS&I products.
It said the issue has been resolved for current and new bereavement claims and a new more robust process was introduced in January 2026.
NS&I also said that the new process takes longer than before and has resulted in delays for current and new claims.
It apologised to those affected by these delays and said it has brought in 100 extra staff to support this work and ensure it returns to processing bereavement claims within usual service standards by autumn 2026.
Sarah Coles, head of personal finance at AJ Bell, said: “NS&I is hoping to bring down the curtain on its notorious bereavement drama, by reuniting the estates of deceased customers with the money it failed to track down – with interest.
“The Government has agreed to waive any inheritance tax that would have been due on the money, or any income tax on the interest.”
She added: “Anyone who has had to deal with an estate is no stranger to delays. Executors have to stick to strict deadlines, and for estates where inheritance tax is due, money has to be handed over within six months of the end of the month in which the person died.
“It means any delays in the process can be expensive as well as frustrating.“
