For as long as 17 years, National Savings and Investments sat on £367 million ($494 million) that belonged to people who had died — and their families were none the wiser. Now, after months of political pressure and the resignation of its chief executive, NS&I has finally begun writing to the estates it short-changed.
The government-backed savings provider confirmed on 19 May that around 34,000 estates were affected by what it termed an 'operational failure' in its bereavement claims process, according toMoneyWeek. When a family lodged a claim after a relative's death, NS&I's system failed to locate all of the deceased's accounts. Savings were left sitting untouched, invisible to the very people entitled to them.
When the scandal broke in March 2026, NS&I initially estimated £476 million ($641 million) across 37,500 estates had been affected. A full review brought the total down to £367 million, though NS&I said the figure could fall further. Roughly three quarters of the cases date from between 2008 and 2025.
NS&I chief executive Dax Harkins resigned in March, shortly after the Treasury learned of the failures in December 2025. Pensions Minister Torsten Bell told the House of Commons that NS&I had disclosed 'operational failures' in its fund-tracing processes and announced former HM Revenue and Customs boss Sir Jim Harra as interim replacement — a move Bell described as a 'fresh start', asWhich?outlined.
Sir Jim said the issue 'should not have happened' and repeated NS&I's apology.
'Dealing with the death of a loved one is a difficult and upsetting time,' he said. 'We know we need to do all we can to make the process of accessing a deceased saver's NS&I holdings as straightforward as possible for personal representatives and executors of estates.'
NS&I has since hired 100 additional staff to work through the backlog. The provider introduced a more thorough search system in January 2026, but it has slowed processing times. Bereavement claims that normally take two weeks are currently taking eight. NS&I expects waiting times to return to normal by autumn.
Letters began going out on 27 May to executors and personal representatives of estates with holdings of £10 ($13) or more. NS&I will send them in weekly batches, with payments following 'soon after' each letter. The full process is expected to stretch into mid-2027.
Each letter will confirm the amount owed and explain how estates can reclaim legal or administrative costs that arose from the error. NS&I said it will review those requests on a case-by-case basis.
Alongside the principal, NS&I will pay interest at whichever rate is higher — the amount that would have accrued since the error, or the Bank of England base rate (currently 3.75%) plus one percentage point, giving a floor of 4.75%. Bell confirmed to MPs that repayments will be exempt frominheritance tax. Income tax will not apply to interest accrued before the account holder's death,MoneySavingExpertnoted.
Source: International Business Times UK
