NS&I scandal: What it means for you

National Savings and Investments (NS&I), owned by the government, has admitted to administrative errors which prevented families from accessing their deceased relatives’ savings.

In some cases, bereaved families have been struggling to access their loved one’s funds and denied payouts for as long as five years, despite multiple enquiries made to NS&I to trace the funds.

The admission comes following an investigation by the Daily Telegraph.

NS&I informed the Treasury in December of “operational failures” in tracking down the funds, but says that these errors have now been resolved.

Former NS&I chief executive Dax Harkins has resigned from the company and former HMRC chief Sir Jim Harra has been appointed on an interim basis.

Attwaters has written this blog post to help any individuals who may be affected recover their funds and seek compensation.

What is NS&I?

NS&I was founded in 1861 by the Post Office as its savings bank and now has over 24 million customers, including 22 million premium bond holders, with funds worth £240 billion. Premium bond holders compete in a monthly prize draw to win cash. The money loaned by savers is used by the government to fund public services.

The appeal of NS&I is its perceived security, as 100% of account holders’ savings are guaranteed by the UK Treasury. Most UK banks signed up to the Financial Services Compensation Scheme, in comparison, only guarantee the first £120,000 of an individual’s savings.

What went wrong at NS&I?

Some bereaved families have been denied access to their deceased relatives’ money in NS&I accounts and premium bonds for years.  Due to a system error, some premium bond prizes and savings were not paid out to deceased holders’ estates.

NS&I admitted on 25 March that it had suffered “an operational failure” and said that it had told the Treasury of the problems on 18 December 2025. It says the problem has now been fixed and new measures have been brought in to prevent a recurrence.

How many people are thought to be owed money by NS&I?

Around 37,500 individuals and funds worth up to £476 million are affected. Around 75% of the cases relate to the years between 2008 and 2025.

What should happen to NS&I-held funds after a saver’s death?

In the event of a saver’s death, the deceased’s next of kin or executors must inform NS&I. It then traces all the deceased’s linked accounts and starts the process of closing them.

NS&I may be able to release funds to estates valued at less than £5,000 without probate on presentation of a completed claim form and death certificate.

However, holdings worth more than this generally require Letters of Administration or a Grant of Probate.  

Premium bonds can stay in the monthly prize draws for up to a year after the deceased’s death before they are claimed, as well as any winnings for that period, giving the executor time to settle the estate before the prizes are claimed or bonds redeemed.

What is NS&I doing to resolve the situation?

NS&I says it is “working hard to ensure everybody affected is paid what is owed to them”. It says that families, beneficiaries and deceased customers’ estates do not need to take any immediate action and that it will contact affected estates and publish further information “in due course”.

Could I be owed compensation?

Pensions Minister Torsten Bell says that those affected by the issues may receive compensation “where appropriate”.

Meanwhile, NS&I says in a statement that it will ensure “customers’ estates are appropriately compensated” and that more information will be published in May.

The situation also underlines how important it is for you and your family to have up-to-date wills in place.

If you or your loved ones have been affected by this, please get in touch with our experienced estate planning team, who can contact NS&I on your behalf. Call us today on 0330 221 8855 or email our Wills, Trusts & Probate partner Tony Brownlie directly at tony.brownlie@attwaters.co.uk for trusted, independent advice.