National Savings and Investments (NS&I) has confirmed that customers awaiting compensation from the bereavement scandal may face a prolonged wait, with repayments potentially extending until mid-2027. The government-backed savings institution, under the Treasury and Labour Party government, acknowledged that the new checking process is taking significantly longer than anticipated.
Repayment Timeline Extended
NS&I stated that it aims to complete all repayments by 30 June 2027. The institution will begin contacting affected families next week, but the process is expected to be lengthy. In March, NS&I estimated that approximately 37,500 bereavement claims, totaling £476 million, may have been impacted by the tracing error.
Support Measures Announced
To assist affected estates, NS&I has introduced support measures, including a full inheritance tax exemption for holdings returned to the rightful estates. This exemption applies to the remediation population affected by the NS&I tracing error.
Sir Jim Harra, interim chief executive of NS&I, apologized to all affected individuals, stating: "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." He emphasized the need for sympathetic and swift processing of bereavement claims, noting that additional staff have been hired to improve service times.
Expert Commentary
Sarah Coles, head of personal finance at AJ Bell, commented on the situation: "NS&I is hoping to bring down the curtain on its notorious bereavement drama, by reuniting the estates of deceased customers with the money it failed to track down – with interest." She highlighted that the government has agreed to waive any inheritance tax on the money and income tax on the interest.
Coles added: "Anyone who has had to deal with an estate is no stranger to delays. Executors have to stick to strict deadlines, and for estates where inheritance tax is due, money has to be handed over within six months of the end of the month in which the person died. It means any delays in the process can be expensive as well as frustrating."
