Bereaved individuals affected by the National Savings and Investments (NS&I) lost funds scandal will be contacted by the bank in the coming weeks regarding access to their loved ones' money. The bank announced Tuesday that it will reach out to all affected estates with holdings of £10 or more to "reunite them with the full value of those holdings."
Thousands of people were underpaid on funds their deceased relatives held with NS&I due to errors in identifying all products tied to the customer before death. The estates of approximately 34,000 deceased individuals were impacted, with total bereavement claims reaching £367 million. The former head of the government-backed bank resigned over the scandal in March.
Payments will begin in the coming months and are expected to be fully disbursed by the first half of next year. Affected holdings will be adjusted upward to include either interest accrued since the error or the Bank of England base rate plus one percentage point, whichever is higher. The funds will be exempt from inheritance and income tax, and the bank will provide details on requesting reimbursement for reasonable legal costs incurred due to delays.
Families, beneficiaries, and executors do not need to take any action at this stage. NS&I stated that the error has been rectified and a more robust process for bereavement claims was implemented in January.
'A lot of unnecessary work'
Jennifer Brough, 82, from Doncaster, criticized NS&I's service as "not good enough." She spent six months trying to access her late husband's savings after his death in 2024. NS&I demanded a grant of probate, which her solicitor said was unnecessary. "I found this very hard. At a time when you are low, having to get help... eventually being paid, with a lot of unnecessary work," she said.
Rhona Edwards, whose husband Alex passed away in November, completed paperwork to release his £50,000 worth of premium bonds but was still waiting by March. The delay prevented her from finalizing Alex's estate. Rhona, from near Chepstow in Monmouthshire, told the BBC the hold-up was frustrating.
NS&I, which has 24 million customers, offers savings and investment products including premium bonds. Its appeal lies in the security of government-guaranteed savings. However, some bereaved families have spent years navigating multiple forms, phone calls, and distress to access funds, with some turning to lawyers and incurring additional costs.
Sir Jim Harra, NS&I's interim chief executive, apologized: "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."