NS&I has initiated communication with numerous families who have been deprived of savings due to the passing of a family member. The financial institution, supported by the Treasury, encountered difficulties in locating accounts belonging to deceased clients, leading to delays or non-payment of savings and Premium Bond rewards to their beneficiaries. This issue primarily occurred between 2008 and 2025.
An estimated £367,000 is owed to 34,000 estates by NS&I, a reduction from the initial figures of 37,500 families and £476,000 in claims value. The company anticipates further reductions in these numbers. Serving over 24 million customers, including more than 22 million Premium Bonds holders, NS&I has commenced the process of contacting affected estates with holdings of £10 or more to facilitate the return of funds.
According to NS&I, the payouts will include either the accumulated interest since the error occurred or the Bank of England base rate plus one percentage point. The institution plans to send letters to affected parties starting from May 27, 2026, with payments following shortly after. NS&I aims to complete the communication process with estates by 2027.
The institution will directly reach out to the legal representatives of affected estates, assuring that recipients expecting payments need not take any action as NS&I will make contact. NS&I has confirmed that the payments will be exempt from inheritance tax, and the administrators of estates will not be liable for the income tax typically owed on pre-death interest.
NS&I acknowledged and apologized for the delays caused by the trace process used in handling bereavement claims. It has introduced a new system as of January 2026, although this has resulted in additional processing time and delays. To rectify this, NS&I has employed 100 extra staff to expedite the resolution of claims and aims to return to standard service levels by autumn 2026.
Recently, it was disclosed that NS&I’s chief executive, Dax Harkins, would be succeeded by former HM Revenue and Customs boss Sir Jim Harra. Sir Jim, currently serving as interim chief executive at NS&I, expressed regret over the issue and emphasized the importance of promptly addressing the outstanding matters. He highlighted the need for sympathetic treatment and swift processing of bereavement claims, acknowledging the current delays and the steps being taken to enhance service efficiency.
