National Savings and Investments (NS&I) has admitted to longstanding problems with tracing accounts belonging to deceased customers, leaving 34,000 bereaved families owed £367m. The government-backed bank is now set to contact affected families from next week, with payments expected to follow shortly after, though the full rectification process may take at least a year.
The failures have compounded the distress of relatives already dealing with loss. Kate Constable, whose mother held £46,000 in premium bonds, described the claim process as “a year of hell”. The need to obtain probate for amounts over £5,000—a threshold far lower than at other institutions like Barclays or Hargreaves Lansdown—added significant delays. Constable’s father, who has Alzheimer’s, was forced to take out a loan to cover care fees while waiting for the inheritance.
NS&I’s outmoded paper-based system has been widely criticised. Customers must post forms, death certificates, proof of identity, and often probate documents. Bereavement inquiries now take eight weeks, up from two, due to a new, more thorough search process introduced this year. The ultimate settlement time varies by case.
The tracing issue is thought to stem from historic system migrations and incomplete records, particularly for paper bonds opened in the 1950s and 1960s. Duncan Stevens of account tracing firm Gretel noted that NS&I’s 160-year-old records have passed through multiple systems, increasing the risk of errors.
Former HMRC boss Sir Jim Harra, appointed to resolve the crisis, acknowledged the new process “takes longer than before” and has caused delays. Nonetheless, he maintained that the search problems have been fixed. Affected families will be contacted in stages, with the first group being reached next week.
