NS&I to Contact Families Owed £367 Million in Bereavement Claims
National Savings and Investments will begin contacting thousands of families next week to repay £367 million in withheld savings. The state-backed bank revised its earlier estimate and said payments will be adjusted for interest or the Bank of England base rate plus one percent.
theweek.comNational Savings and Investments will start contacting thousands of families next week to repay £367 million in withheld savings from deceased account holders. The state-backed bank said up to 34,000 estates are affected. The bank revised its March estimate of £476 million downward after a review of accounts.
Sir Jim Harra, the interim chief executive, said the original search process failed to identify all relevant NS&I products when handling bereavement claims.
Harra stated the issue was resolved for current and new claims starting in January 2026. He added that the new search process takes longer and has caused delays to ongoing claims. The bank will contact personal representatives and executors of estates holding £10 or more. Payments will be made in phases, with the first group reached next week.
Payments will include whichever is higher between interest accrued since the error or the Bank of England base rate plus one percentage point. Affected payments will be exempt from inheritance tax, and executors will not owe income tax on the sums. Pensions minister Torsten Bell said NS&I aims to complete the remediation programme in the first half of 2027.
Harra is due to report on the tracing problem and lessons learned before the summer recess.
Key Facts
Story Timeline
4 events- March
NS&I chief executive was removed after long-running tracing problems emerged.
1 sourceThe Guardian - January 2026
New search process implemented for current and new bereavement claims.
1 sourceThe Guardian - Tuesday
NS&I published update revising withheld amount to £367 million.
1 sourceThe Guardian - Next week
Bank will begin contacting first group of affected families.
1 sourceThe Guardian
Potential Impact
- 01
Affected families will receive payments adjusted for interest or Bank of England base rate plus one percent.
- 02
Executors will not pay inheritance tax or income tax on the returned amounts.
- 03
NS&I will add staff to reduce delays in current and new bereavement claims.
Transparency Panel
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