The Treasury has confirmed that up to 15,600 estates could receive missing savings and compensation following failures at National Savings and Investments (NS&I) in the way it handled claims involving customers who had died.
Minister for Pensions Torsten Bell confirmed in a written statement to Parliament that just under 30,300 estates, with savings worth up to £181.9 million, may have been affected by errors that meant some accounts were overlooked when families tried to claim money belonging to deceased relatives.
Repayments and compensation underway
The Treasury-backed savings provider is contacting up to 15,600 estates with holdings of £10 or more to return money that should have been paid previously, together with compensation.
More than £3 million in repayments and compensation has already been issued to 613 affected estates, with the programme expected to be completed during the first half of 2027.
The problem emerged after NS&I discovered that its previous search process for bereavement claims had failed to identify all relevant accounts belonging to some deceased customers. This meant families could have received payments from certain savings products without being told about other money held by the same person.
Government response and oversight
NS&I offers a range of savings and investment products, including Premium Bonds, and all money deposited with the provider is backed by the Treasury.
In his parliamentary statement, Mr Bell confirmed that the Treasury had instructed NS&I to address the failures and appointed former HMRC chief Sir Jim Harra as interim chief executive. He stated: "The Treasury instructed NS&I to put this right swiftly and fairly, requiring a delivery plan detailing how they intended to do so be published in May."
The minister also confirmed that the Treasury has established a Sponsor and Oversight Board to strengthen supervision of NS&I's transformation programme. Sir Jim has undertaken a review into the background to the bereavement claims failures and the lessons that must be learned, which will be published before the end of 2026.
Thousands of estates affected
Initial estimates published in March suggested that around 37,500 estates, with holdings worth £476 million, could have been affected. This was revised in May to 34,000 estates and £367 million, before the latest assessment reduced the number to just under 30,300 estates and the potential value to £181.9 million.
NS&I confirmed that around 7,200 cases initially included in its estimates have since been excluded because they were current claims successfully completed through normal processing. The provider expects the number of affected estates to fall further as its investigations continue.
Its latest update also confirmed that 795 letters had been issued to affected estates as of October 23, with 613 payment warrants issued. The total value of repayments and compensation issued had reached £3.36 million, including compensatory interest. The highest individual repayment issued was £269,225, while the lowest was £11.
Compensation for affected families
Estates affected by the errors will receive the money that should have been paid when the original bereavement claim was processed, together with additional payments to compensate for the delay. These payments will include whichever is higher: the interest accrued since the error occurred or an amount calculated using the Bank of England Base Rate plus one percentage point.
NS&I has also confirmed that affected estates can request reimbursement of reasonable additional costs arising from an unexpected repayment, with requests considered individually.
The UK Government has announced plans for a full inheritance tax exemption on affected holdings returned to estates, alongside income tax relief for personal representatives and executors on certain interest payments. The detailed tax reliefs will be introduced through legislation.
NS&I interim chief executive Sir Jim Harra said: "I want to reiterate my apology to everyone affected by the bereavement claims issue. Repaying estates the money that is rightfully theirs and restoring our normal high service standards are key steps in putting things right, and this process is now underway."
Checking for unclaimed NS&I savings
NS&I is contacting the legal representatives of estates identified through its review, rather than contacting beneficiaries directly. Letters will confirm the amount owed, explain the repayment arrangements and provide a dedicated telephone number for enquiries.
Holdings below £10 will also be returned if an affected estate contacts NS&I, although these smaller amounts are not included in its proactive contact programme. Anyone dealing with the estate of a deceased relative who believes they may have held NS&I products can use the provider's bereavement service to establish whether money remains to be claimed.
NS&I has confirmed that where it cannot trace an affected estate, the money will continue to be held, along with any interest being earned, until the estate can be repaid. The provider also confirmed that changes to its bereavement claims process temporarily increased response times to eight weeks during the spring and early summer. However, it is now responding to new claims within its normal service standard of 14 days. The repayment and compensation programme is expected to be completed during the first six months of 2027.
