NS&I to Contact 34,000 Bereaved Families Over £476 Million Lost Funds Scandal
National Savings and Investments (NS&I) is set to contact approximately 34,000 bereaved families in the coming weeks regarding their loved ones' lost funds. The government-backed bank failed to pay out the full value of deceased relatives' savings due to errors in identifying all products held by customers before their death.
The scandal, which led to the resignation of the former NS&I chief executive in March, affected estates with bereavement claims totalling £476 million. NS&I confirmed that all affected estates holding £10 or more would be contacted to "reunite them with the full value of those holdings."
Payments are anticipated to begin in the coming months, with all funds expected to be disbursed by the first half of next year. Affected holdings will be adjusted to include either accrued interest since the error or the Bank of England base interest rate plus one percentage point, whichever is higher. NS&I has stated these funds will be exempt from inheritance tax and income tax.
Victims will also receive details on how to claim reimbursement for reasonable legal costs incurred due to the delays. NS&I advises affected families, beneficiaries, and executors that no immediate action is required on their part.
The bank asserts that the underlying error has been rectified, and a more robust process for bereavement claims was implemented in January. However, customer experiences highlight ongoing issues. Jennifer Brough, 82, from Doncaster, reported a six-month struggle to access her husband's savings following his 2024 death, being wrongly pressured to provide a grant of probate.
Similarly, Rhona Edwards, from Monmouthshire, faced significant delays in accessing her late husband Alex's £50,000 worth of premium bonds, preventing her from finalising his estate. Sir Jim Harra, interim chief executive of NS&I, apologised, acknowledging current processing times are "longer than they should" and confirming additional staff have been deployed to address the backlog.
