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Join Which? MoneyNS&I to repay millions after bereavement failures: what you need to know
NS&I has published its compensation plan for estates which have been affected by the error
With a background in financial journalism across national titles, Ruby loves helping people take control of their money and specialises in pensions, tax, banking and benefits.
National Savings and Investments (NS&I) will start to pay back hundreds of millions of pounds to the families of customers who have died from next week.
The move follows an error in how the state-backed savings provider handled some bereavement claims, which meant not all NS&I products linked to a customer were identified.
Around 34,000 bereavement cases are thought to be affected, with missing payments estimated to total up to £367m.
Here, Which? explains what has happened, why compensation could be due, who will be eligible and what those affected should do now.
What happened to NS&I bereavement cases?
After reports from major news publications, such as the Daily Telegraph, earlier this year, NS&I admitted to failing over a number of years to identify all accounts held by some deceased customers.
This meant that some savings and premium bond prizes were not paid out or were delayed, leaving families waiting for money owed to estates. Around three quarters of the cases relate to the period between 2008 and 2025.
On 25 March, NS&I said its systems had suffered an 'operational failure' and confirmed that it had informed the Treasury on 18 December 2025. It added that the issue has now been fixed and new measures have been introduced to prevent it from happening again.
The current customer-facing supplier, Sopra Steria, confirmed that the tracing issue has been fixed, which will prevent future errors. Atos, the previous supplier responsible for bereavement cases until 2025, has also committed to cooperating fully with the investigation.
- Find out more: what is National Savings & Investments?
How many people are affected?
In March 2026, NS&I estimated that around 37,500 bereavement claims with a total value of £476m may have been affected by this issue.
However, this figure has decreased, and as of May 2026, it's estimated that up to 34,000 estates, with a total value of approximately £367m, were affected.
However, NS&I says this number could decrease further as its compensation scheme progresses.
NS&I noted that the issue had affected only a small number of cases, and in 2025, it received 211,800 new bereavement claims and repaid £4bn. This equates to around two million bereavement claims over the past 10 years.
- Find out more: premium bonds turn 70. How it stole the hearts of UK savers.
How the compensation scheme will work
NS&I has now published its delivery plan, which details how it will proactively contact affected estates and how they will be compensated:
Contacting affected estates
From 27 May 2026, NS&I will begin contacting estates where the value of missing holdings plus accrued interest is £10 or more.
Letters will be sent to the personal representatives or executors of deceased customers’ estates. Beneficiaries won't be contacted directly unless they're also acting as the personal representative or executor.
If NS&I is unable to contact an estate, it says it will continue to hold the funds, alongside any accrued interest, until the estate gets in touch.
Compensation and reimbursement
To compensate for the delay, NS&I says payments will be adjusted upwards using whichever is higher: the interest that would have accrued or the Bank of England base rate, plus one percentage point, in line with Financial Ombudsman Service (FOS) guidance.
NS&I also says payments made as a result of the tracing error will be exempt from inheritance tax (IHT). Personal representatives or executors won't have to pay income tax on interest relating to the period before death or during the administration of the estate.
In addition, NS&I says it will reimburse any extra professional service costs incurred because of the error, such as legal or administration fees linked to receiving an unexpected payment.
Affected personal representatives or executors will be told how to request reimbursement, with claims reviewed on a case-by-case basis.
NS&I said the £10 minimum threshold was set to ensure as many affected estates as possible receive their money while avoiding disproportionate administrative costs linked to processing very small balances.
When will payments be made?
Payments will begin shortly after the letters are sent and received. Letters will be sent out in weekly batches, and NS&I says it expects the compensation scheme to be concluded in the first half of 2027.
NS&I says no action is required from the families, beneficiaries or the personal representatives and executors of deceased estates. There's no need for individuals to use a claims management company or solicitor.
- Find out more: have you won a premium bond prize?
Be wary of scammers
Be on high alert for scammers targeting the NS&I bereavement remediation. These groups tend to exploit high-profile financial news stories by sending phishing emails or texts with 'claim' links to steal personal data.
Remember that NS&I will contact affected estates directly by post, and will never ask for upfront fees to release funds, and will never request your Pin or passwords over the phone.
If you receive an urgent message claiming that you must act fast to secure a refund, it's likely a scam – genuine claims are handled free of charge and don't require you to click a link or move money to a 'safe account'.
What has NS&I said?
As part of a 'fresh start' for the institution, in March, NS&I chief executive Dax Harkins resigned and was replaced on an interim basis by former HMRC boss Sir Jim Harra.
Sir Jim Harra released a statement alongside the plan, he said: 'Dealing with the death of a loved one is a difficult and upsetting time. 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.
'We have made changes to how NS&I processes bereavement claims so that this issue does not recur. The new, more thorough search process, introduced in January 2026, takes longer than before and has, unfortunately, resulted in delays to current and new claims.
'I want to extend my apology to people affected by these delays. We have brought in 100 extra staff to ensure we return to processing bereavement claims within our service standards. We will publish an update on progress against this plan quarterly.
'We are also looking at where we can make further improvements to our bereavement service.'
- Find out more: should you buy premium bonds?
What happens to NS&I savings after a death?
Under the standard process, executors or next of kin must notify NS&I of a death so it can trace all linked accounts and begin closing them.
For estates valued under £5,000, NS&I may be able to release funds without probate, typically upon receipt of a death certificate and a completed claim form. Larger holdings usually require a Grant of Probate or Letters of Administration.
Premium bonds are allowed to remain in the monthly prize draws for up to 12 months after the date of death before they're claimed, alongside any winnings during this period.
This gives the executor time to settle the estate before the bonds must be cashed in or the prizes claimed.
After this period, bonds are no longer entered into prize draws, but any prizes won can still be claimed by the estate once the account is processed.
Is NS&I a good savings provider?
NS&I is one of the largest savings organisations in the UK, holding more than £240bn for more than 24 million customers. It's owned by the UK government. When you save money with NS&I, you're lending it to the government to fund public services.
Because it's government-owned, all money saved with NS&I is fully protected by HM Treasury. This differs from standard banks, where the guarantee is usually limited to the first £120,000 per person.
In our survey of the best savings providers, NS&I received a customer score of 64%, placing it in the bottom half of our table. It received an interest rate score of 74%. It received two stars for its customer service in general and for its transparency in regular communications. It received three stars for its online banking service.
- Find out more: best savings providers 2026.
This story has been updated since it was first published in March. It was last updated on 20 May to add details about the compensation plan.
