NS&I to Contact Bereaved Families Over Lost Funds
National Savings and Investments (NS&I) will begin reaching out to individuals affected by the lost funds scandal involving deceased customers' accounts in the coming weeks. The bank aims to facilitate access to the money held by their late relatives.
Errors in identifying all NS&I products owned by customers prior to their deaths resulted in thousands of people not receiving the full amounts owed from their deceased relatives' savings.
Approximately 34,000 estates were impacted, with bereavement claims amounting to a total of £476 million. The former head of the government-backed institution resigned in March amid the controversy.
On Tuesday, NS&I announced that all affected estates with holdings of £10 or more will be contacted to "reunite them with the full value of those holdings." The repayment process is expected to commence in the coming months and be completed by mid-next year.
Holdings will be increased to include either the interest accrued since the error occurred or the Bank of England base interest rate plus one percentage point, whichever is higher.
The bank confirmed that these funds will be exempt from inheritance tax and income tax.
Details will also be provided to those affected on how to request reimbursement for reasonable legal costs incurred due to delays in accessing the funds.
NS&I emphasized that families, beneficiaries, and executors do not need to take any action at this stage.
The institution has stated that the error causing the scandal has been corrected, and a more robust bereavement claims process was implemented in January.
Personal Experiences Highlight Service Issues
Jennifer Brough, 82, from Doncaster, criticized NS&I’s service, stating it "is not good enough" and called for reform.
Following her husband's death in 2024, Jennifer faced a six-month delay in accessing his savings. She was required by NS&I to provide a grant of probate, despite her solicitor advising it was unnecessary.
"They would not release the money until I produced this," Jennifer explained. "I found this very hard. At a time when you are low, having to get help to do it for me to save money, eventually being paid, with a lot of unnecessary work."
Rhona Edwards, whose husband Alex passed away in November, completed probate and all paperwork to release his £50,000 in premium bonds but was still awaiting a response from NS&I by March.
Rhona, residing near Chepstow in Monmouthshire, told the BBC that the delay was preventing her from finalizing and closing Alex’s estate.
NS&I’s Customer Base and Product Security
NS&I serves 24 million customers and offers various savings and investment products, including premium bonds. The appeal of these products lies in their security, guaranteed by the government.
However, some bereaved families have endured years of difficulty accessing their late relatives' funds, reporting numerous forms, multiple phone calls, and significant distress. Some were compelled to seek legal assistance, incurring additional expenses.
Apology and Steps Forward from NS&I Leadership
Sir Jim Harra, interim chief executive of NS&I, issued an apology to those affected, stating:
"Beginning the process of repaying these funds is a key step in putting things right.
We need to ensure that everybody who makes a bereavement claim with NS&I is treated sympathetically and has their case processed as quickly as possible.
Today, this process is taking longer than it should. We have brought in additional staff to get the service back on track."
