National Savings and Investments (NS&I) will begin contacting thousands of families next week who are owed a total of £367m after a tracing error failed to identify accounts belonging to deceased customers. The state-backed bank previously estimated the sum at £476m, but revised the figure down in an update on Tuesday, with up to 34,000 estates affected.
Sir Jim Harra, the interim chief executive and former HM Revenue and Customs boss, apologised for the error, saying: 'This issue should not have happened. Beginning the process of repaying these funds is a key step in putting things right.' The problem arose because the search process used when handling a bereavement claim did not identify all relevant NS&I products, Harra explained. The issue has been resolved for new claims from January 2026, but the new, more thorough process has caused delays.
NS&I, one of the UK's largest savings organisations with over £240bn on behalf of 24 million customers, has faced complaints about failing to pay out cash prizes to families of deceased savers and losing track of money. Harra acknowledged that the current process 'takes longer than before' and said additional staff have been brought in to improve service.
The bank will contact personal representatives and executors of estates with holdings of £10 or more directly. Pensions Minister Torsten Bell confirmed that the first cohort will be contacted next week, with payments made shortly after. The remediation programme is expected to be completed by the first half of 2027.
To ensure estates are not disadvantaged, payments will be adjusted upwards by the higher of interest accrued since the error or the Bank of England base rate plus one percentage point. Payments will also be exempt from inheritance tax, and executors will not have to pay income tax on sums that would ordinarily be due.
