NS&I bereavement claims – update

NS&I will next week begin contacting the estates of deceased customers who, due to an error, were not repaid money from all of their NS&I accounts following a bereavement claim.

Key measures put in place to support affected estates include:

· NS&I will contact all affected estates with holdings of £10 or more to reunite them with the full value of those holdings that should have been returned to them earlier. To ensure estates have not been disadvantaged by the delay, this will then be adjusted upwards to include either the higher of the interest accrued since the error occurred, or the Bank of England base rate plus one percentage point, in line with Financial Ombudsman Service (FOS) principles.

· There will be a full inheritance tax exemption for the holdings of the remediation population affected by the NS&I tracing error which are returned to the estates to which they rightly belong. To further ease the administration of estates, the personal representatives or executors will not be liable for any Income Tax ordinarily due in their role on interest accrued before death or in the administration period.

· There is nothing that families, beneficiaries or the personal representatives and executors of deceased estates need to do. NS&I will contact the personal representatives and executors of estates with holdings of £10 or more directly. Payments to affected estates will run over the coming months and are expected to conclude in the first half of 2027.

Bereavement claims processing

This error happened because the search process used when handling a bereavement claim failed to identify all NS&I products. The issue has been resolved for current and new bereavement claims and robust measures have been introduced to ensure this does not happen again.

The new, more robust process, introduced in January 2026, takes longer than before and has unfortunately resulted in delays for current and new claims. NS&I apologises to those affected by these delays and has brought in 100 extra staff to support this work and ensure it returns to processing bereavement claims within usual service standards by autumn 2026.

NS&I is also looking at where it can make further improvements to its bereavement service.

Sir Jim Harra, Interim Chief Executive, NS&I, said:“I apologise to everyone who has been affected by this issue. Beginning the process of repaying these funds is a key step in putting things right.

“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.”

Number of customers affected

On 26 March, NS&I, supported by external advisers, estimated that around 37,500 bereavement claims with a total value of £476 million may have been affected by this issue. As the review has progressed, this number has reduced and is likely to reduce further. Today, 19 May, NS&I’s assessment is that up to 34,000 estates with a total value of approximately £367 million have been affected.

NS&I will contact those estates where the capital in the deceased customer's accounts plus accrued interest is £10 or more. The de minimis threshold is being set lower than seen in some redress cases, reflecting the priority attached to returning funds to those affected while avoiding creating disproportionate administrative burdens and disturbance in the cases of the smallest holdings.

NS&I has today (19 May 2026) published a plan for repaying affected estates.

Additional information

• Written Statement to Parliament from the Minister for Pensions published today.
• NS&I holds over £240 billion in customer deposits (total stock).
• In 2025, NS&I received 211,800 new bereavement claims and repaid £4 billion.
• This equates to around two million bereavement claims over the last ten years.