NS&I Kept £367m From Dead Customers — How to Check If You're Owed a Refund

National Savings & Investments (NS&I), the government-backed savings provider behind Premium Bonds, has admitted it wrongly held on to £367 million belonging to around 34,000 deceased customers — some of it dating back to 2008. The error came to light after an internal review flagged a pattern of unclaimed balances sitting on accounts long after the account holder had died, according to Saga's Paul Lewis money news roundup.

What went wrong

When an NS&I customer dies, their executor or personal representative is supposed to be contacted so the balance can be paid out to the estate. In tens of thousands of cases, that contact never happened, and the money simply sat in dormant accounts. NS&I has now begun proactively tracking down executors to return the funds, with a target of completing repayments by mid-2027.

Crucially, the restored money is exempt from both inheritance tax and income tax, since it reflects a refund of money that was always the estate's property rather than new income or a windfall.

Why it matters

NS&I is backed by HM Treasury, so its products (Premium Bonds, Income Bonds, fixed savings) are seen as close to risk-free. This episode is a reminder that "risk-free" doesn't mean "administratively perfect" — probate delays and poor record-keeping can leave money in limbo for years, regardless of which institution holds it.

It also lands alongside wider scrutiny of how banks handle customer money after death, including a separate ongoing review of bank branch closures that has made face-to-face help with probate and account closures harder to access for some families.

What to do if you're an executor or beneficiary

Checklist: tracing money in a deceased relative's name

• Check for any NS&I holdings (Premium Bonds, Income Bonds, savings certificates) using the NS&I tracing service — you'll need the death certificate and proof you're the executor or next of kin.
• Search the free unclaimed assets register run alongside the probate process for other dormant accounts.
• Contact NS&I directly if you believe a relative held Premium Bonds or savings certificates that were never formally closed out, even if you already went through probate — this specific error may not have surfaced during the original process.
• Keep records of probate/grant of representation, as NS&I will require this before releasing funds.
• Don't assume "no letter means no money" — NS&I's own systems failed to flag many of these cases, so proactive checking is worthwhile even without a prompt from them.

Key Numbers

• £367 million wrongly retained from deceased customers
• 34,000 affected customers identified
• Errors dating back to 2008
• Repayment target of mid-2027
• NS&I is backed by HM Treasury

Sources

• Paul Lewis: July 2026 money news — Saga
• NS&I bereavement guidance
• GOV.UK: search for money owed to you

Educational content only — not financial advice.