National Savings and Investments (NS&I) has provided a crucial update regarding compensation payments for families impacted by the bereavement scandal. Customers awaiting repayments may have to wait until as late as June 30, 2027, as NS&I works through a complex verification process.
NS&I, a government-backed institution, acknowledged that the repayment timeline has extended beyond initial expectations. While the repayment process will begin contacting affected families next week, the completion of all claims is now scheduled for mid-2027.
In March, NS&I estimated that approximately 37,500 bereavement claims—amounting to around £476 million—were potentially affected by errors in their tracing system. To support affected estates, NS&I is also offering a full inheritance tax exemption for returned holdings, ensuring that families receive their entitlements without additional tax burdens.
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Sir Jim Harra, interim chief executive of NS&I, expressed regret over the delays, saying, “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 everyone 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.”
Sarah Coles, head of personal finance at AJ Bell, highlighted the challenges faced by executors dealing with estates. She noted that the government’s agreement to waive both inheritance tax on the recovered funds and income tax on accrued interest helps ease the financial impact on families. However, she cautioned, “Delays in the process can be expensive as well as frustrating, especially since deadlines for inheritance tax payments are strict.”
Despite the setbacks, NS&I is committed to resolving the issue and compensating affected customers fairly. Families awaiting repayments can expect ongoing communication and support throughout this extended process.