NS&I says more than £3m paid to estates so far in compensation scheme update

More than £3 million in repayments and compensation has been issued so far by NS&I after failures meant that bereaved families were missing out on savings pots.

The Treasury-backed provider said more than £3 million in repayments and compensation has been issued to 613 estates so far.

It is contacting affected estates with holdings of £10 or more to reunite them with the full value of the assets that should have been returned to them earlier.

NS&I offers a range of savings and investments to customers, including Premium Bonds.

As it is backed by the Treasury, money held with it has 100% security.

NS&I notified the Treasury in December of an operational failure to trace accounts comprehensively of some customers who had died.

The errors happened because the search process used when handling bereavement claims failed to identify all relevant accounts.

NS&I said the issue was resolved for current and new bereavement claims from January and measures were introduced to ensure the error does not happen again.

It said its more “robust” bereavement claims tracing process takes longer to carry out, and this meant that response times temporarily worsened over the spring and early summer to eight weeks, while NS&I trained and deployed more staff to manage claims.

NS&I said it is now responding to new claims within its service standard of 14 days.

In March, NS&I’s initial estimate was that 37,500 estates with a total value of £476 million may have been affected.

By May, the figures were put at 34,000 and £367 million respectively.

NS&I’s current estimate is that just under 30,300 estates with a value of up to £181.9 million may be affected.

Of these, up to 15,600 have holdings of £10 and over, NS&I estimated.

Some cases that were initially treated as affected by the issue have been excluded as claims were already in place that have been completed through normal processing.

The payments include the higher figure of either the interest accrued since the error happened or the Bank of England base rate plus one percentage point.

NS&I said it still expects the compensation scheme to be completed in the first half of 2027.

Interim chief executive Sir Jim Harra said: “I want to reiterate my apology to everyone affected by the bereavement claims issue.

“Repaying estates the money that is rightfully theirs and restoring our normal high service standards are key steps in putting things right, and this process is now under way.”