How to track down and stake a claim to a Premium Bond inheritance

Families could be missing out on Premium Bond inheritance as billions of pounds remains unclaimed.

The Treasury-backed National Savings and Investments (NS&I) this year started trying to trace the families of savers it suspects may have died. So far it has returned £2.54m to around 2,000 widows and widowers – around £1,250 per family.

In all, the bank has tried to contact more than one million savers and their families whose contact details are not up to date, but so far just 109,000 – around 1 in 10 – have responded.

NS&I says it is the responsibility of the executor of a deceased person’s estate to let it know they have died by completing a bereavement claims form, either online or by post.

Typically, when this is done, the family will be told to leave the investments for 12-months so they can possibly make more money through monthly prizes – but then they are on their own.

But Telegraph Money has also spoken to advisers who say bereaved families still face too many hurdles and can spend hours trying to claim their deceased relatives’ money. 

The Government-backed bank, which gives Premium Bond savers the chance to win £1million every month, has faced criticism in recent years over poor customer service.

The bank faced questions from MPs over a growing customer complaint backlog during the Covid-19 pandemic, which its former chief executive, Ian Ackerley, blamed on the “old technology” his staff were using.  

Around one in three of the UK population – over 22 million people – hold Premium Bonds with NS&I. As of March 31, 2022, the total amount invested with NS&I is £207 billion – which is around £10,000 per person invested.

Withdrawing investments is easy, and an investor merely needs to go onto the NS&I app or portal and request any funds be withdrawn to their bank account. 

But some families have found that it can get very complicated, very quickly, if a spouse passes away and they want to get their money back.

Phil Billingham, a financial adviser at Perceptive Planning, said the wife of a client of his went through this process with NS&I over three years ago when her husband died, who had invested £50,000 in Premium Bonds. 

She went through the correct channels and filled in the right paperwork, only to find that NS&I failed to transfer her the money, and never followed up.  

Mr Billingham said NS&I admitted there was no process for contacting grieving families waiting for their money, and it was up to them to chase up the investment scheme – despite a poor record of customer service and lengthy waiting times.

He said: “With the grief and disruption at the time, neither the widow nor the executors noticed that the money was never transferred to her after the initial 12-month period,” he said.

“There seems to be no process at the end of that time period for NS&I to contact the spouse or family and tell them the money is there – despite the family alerting them of the death, and that probate had been granted.

“At no point did NS&I contact the widow and ask if she needed the money. And in fact, they have informed us they have no process to do so. We were informed this was to save the taxpayer the costs of postage. We only realised because a tiny alert showed up on the deceased client’s account on an adviser portal telling him to contact them – but he is dead.”

He added many grieving families could be missing out on thousands – if not millions – of pounds if the Government investment scheme is not following up with the families of deceased investors.

He said: “They told us that they will not communicate with families of deceased people by email or phone. They say it’s not secure, and will only communicate by post – which makes it hard due to the amount of paperwork needed, and the costs of posting – especially for older people.

“It all depends on how people were investing in NS&I premium bonds or savings. If they use the internet or their smartphones, then there may be no paperwork, and so there is little chance that families are going to be aware they could have substantial funds available to them if NS&I aren’t alerting them.

“For older people, it could be almost impossible. Paperwork can get lost and NS&I won’t release statements to families. Without a paper trail, many people could be missing out on substantial amounts because they aren’t being told it’s there, or not being contacted after the initial 12-month period has passed. There should be annual statements from NS&I to the representative of the family member that died.”

NS&I told The Telegraph that as of March 31 2022, the total amount in unclaimed assets in the scheme was £3.65bn. But, it could not say what amount was still unclaimed for savers who have died.

A spokesman said: “We recommend that all of our customers keep financial records to ensure that their loved ones can easily access any money, savings or assets that are in their name when they die. We keep all funds safe until the rightful beneficiaries come forward to claim them.”

NS&I cut back its workforce a few years ago, which led to huge delays in processing bereaved spouses’ requests for their deceased family members’ money. The scheme also began trialling a “hybrid-working” model last year, so some of its staff are working from home.

Financial adviser Daniel Williams added: “There’s always a stream of unnecessary barriers and hurdles to overcome every time I have dealt with the NS&I – they have a long way to go.”

Most banks will release account balances of less than £25,000 to families before requiring sight of a grant of probate after someone dies.

But this is not the case with NS&I – and it can cause difficulties for grieving families, according to Anna Wensley Stock, a partner at law firm Wansbroughs.

She said: “The release threshold set by NS&I is £5,000, which is lower than the limit many banks have for closing a deceased account and passing on the balance without the need for probate.

“It does get hard for couples when someone dies, as NS&I does not allow people to hold joint accounts. So the spouse of a deceased person will then need to go through the whole process to get the money – which is time consuming and can involve fees.

“Families need a full picture of the deceased person’s assets at their death – which includes Premium Bonds, and everything else they had as well, such as bank balance and investments.

“My advice would be that while people are still alive, take a stocktake and be aware of what they hold and what their spouse holds. It’s much easier to find out if someone has Premium Bonds while they’re alive, and they can then make a decision on whether they want to keep them.”