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Join Which? MoneyNS&I repays £3m after bereavement failures: what you need to know
NS&I has started paying compensation to estates that 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) has paid out more than £3m so far as part of its compensation scheme, after operational errors meant bereaved families did not receive their deceased loved ones’ savings.
The Treasury-backed provider began issuing payments in May and, so far, 613 estates have received compensation. The move follows an error in how it handled some bereavement claims, which meant not all NS&I products linked to a customer were identified.
NS&I currently estimates that just under 30,300 estates – with a total value of up to £181.9m – were affected by the error overall.
Here, Which? explains what happened, why compensation could be due, who is eligible, and what affected families need to do next.
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.
In March, NS&I said its systems had suffered an 'operational failure'. 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 agreed to fully support the investigation.
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. In May, NS&I published its roadmap, which detailed how it would compensate affected estates.
Alongside this, Sir Jim released a statement confirming that NS&I had overhauled how it processes bereavement claims to prevent the issue from recurring.
The change, introduced in January 2026, was described as a 'more thorough search process', although it now takes longer to complete.
Sir Jim also confirmed that 100 additional staff members had been brought in to help bring claim processing times back within service standards.
In the latest update, Sir Jim repeated his apology to those affected by the delays and said NS&I is now responding to new claims within its usual 14-day target.
He said repaying estates, compensating those affected and restoring normal service were priorities, but acknowledged that rebuilding customers' trust would take time.
- Find out more: what is National Savings & Investments?
How many people are affected?
NS&I has reduced its estimate of the number of estates affected by the issue.
In March 2026, it estimated that around 37,500 estates, holding £476m, could be affected. Its latest estimate is just under 30,300 estates, with a total value of up to £181.9m.
NS&I said the issue affected a small proportion of bereavement claims. It received more than 211,000 new claims in 2025 alone.
- Find out more: premium bonds turn 70. How it stole the hearts of UK savers.
How the compensation scheme works
If you are still waiting for your compensation, this is how NS&I's compensation plan works:
Contacting affected estates
Since May, NS&I has been contacting estates where the value of missing holdings plus accrued interest is £10 or more. Letters go directly to the personal representatives or executors of deceased customers’ estates.
Under the plan, beneficiaries are not contacted directly unless they are also acting as the personal representative or executor.
If NS&I cannot contact an estate, it continues to hold the funds, alongside any accrued interest, until the estate gets in touch.
Compensation and reimbursement
NS&I adjusts payments 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 confirmed that payments made as a result of the tracing error are exempt from inheritance tax (IHT). Personal representatives or executors also do not have to pay income tax on interest relating to the period before death or during the administration of the estate.
In addition, NS&I reimburses any extra professional service costs incurred because of the error, such as legal or administration fees linked to receiving an unexpected payment. The letter to affected personal representatives or executors explains how to request reimbursement, with claims reviewed on a case-by-case basis.
NS&I says the £10 minimum threshold is 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?
Letters are being sent out in weekly batches, with payments following shortly after they arrive. Compensation payments will continue over the coming months until the compensation scheme concludes, which is expected 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 of those affected. You do not need to use a claims management company or solicitor.
- Find out more: have you won a premium bond prize?
How much compensation is being received?
So far, NS&I has paid £3.36m in compensation, including interest.
The average payout is £5,486, although individual payments have ranged from £11 to more than £269,000.
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 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 5 November to add the recent update on the compensation plan.
