NS&I to Contact Bereaved Families Owed £367m After Missing Savings Scandal

National Savings and Investments bank will begin contacting thousands of families next week as part of a plan to return £367m mistakenly withheld from estates of deceased customers, the state-backed lender confirmed Tuesday.

Chief executive Sir Jim Harra, former HM Revenue and Customs chief, apologized for the long-running tracing failures that led to the scandal, saying: “This issue should not have happened. Beginning the process of repaying these funds is a key step in putting things right.”

The bank initially estimated £476m in missing funds, but revised the figure downward to £367m affecting up to 34,000 estates, according to a short update published Tuesday.

Harra, brought in after former CEO Ian Ackerley was forced out in March amid revelations of systematic problems with tracking accounts of deceased customers, said the errors stemmed from an inadequate search process during bereavement claims.

“The issue was resolved for current and new bereavement claims from January 2026 and operational processes changed so that it does not reoccur,” Harra said, but acknowledged that the new, more thorough search “takes longer than before and has unfortunately resulted in delays to current and new claims.”

NS&I holds more than £240bn on behalf of 24 million customers and operates a monthly premium bond draw. Complaints have surfaced that the bank failed to pay cash prizes to families of deceased savers and lost track of funds.

Harra said the new process, while more accurate, has lengthened handling times. “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.”

Affected families do not need to take action. The bank will directly contact personal representatives and executors of estates with holdings of £10 or more.

Pensions Minister Torsten Bell said the bank will begin contacting the first cohort next week, with payments made shortly after. “NS&I aims to return holdings to their rightful owners as swiftly as possible and expects to have completed this remediation programme in the first half of 2027.”

Bell added that Harra will lead a wider “lessons learned” review into the tracing problems, with a report due before the summer recess.

To avoid disadvantaging estates, payments will be adjusted upward by the higher of: interest accrued since the error occurred, or the Bank of England base rate plus one percentage point.

NS&I also said payments resulting from the tracing error are exempt from inheritance tax, and executors will not owe income tax on sums that would ordinarily be due.

The bank reiterated that it will repay all affected families, with the first payments expected shortly after contact begins next week.