National Savings (Remediation Scheme) Regulations 2026
House of Lords · Lords Chamber · 22 Jul 2026 · 8 speeches · Official Report
Motion to Regret
Moved by
That this House regrets that the National Savings (Remediation Scheme) Regulations 2026 were introduced only after a prolonged delay affecting up to 37,500 bereavement claims; and that failures by National Savings and Investments have given rise to a substantial liability for the taxpayer. Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument )
My Lords, this instrument provides National Savings & Investments with the legal powers it needs to establish a compensation scheme and to return money that should have been paid to the estates of deceased customers, in some cases many years ago. That remediation must now proceed as quickly and comprehensively as possible. However, it would be wrong to allow this negative resolution instrument to pass without formally noting the harm that has been caused and the serious failures that have surrounded this entire saga. It is significant that the Secondary Legislation Scrutiny Committee drew the regulations to the attention of the House because they raise significant public policy issues and because Ministers have not answered important questions. Moreover, the Commons Statement of 26 March on the problems at NS&I was not repeated in our House because we had broken for Easter. I add that this is not the only problem we have heard about in relation to probate. There were terrible delays, especially during Covid-sometimes of years-and I have personal experience of lost submissions to the probate office. As recently as 6 July, we debated my noble friend Lord Mackinlay’s amendment to force financial institutions, which would include NS&I, to use the IHT423 scheme to allow executors to source funds to pay inheritance tax in advance of the unrealistic six-month deadline for probate and to avoid the punitive rate of interest: 4% above base rate, so that is 7.75% at present. All this...
My Lords, as the noble Baroness, Lady Neville-Rolfe, has clearly explained, the estates of deceased customers of NS&I were not always repaid money from all their accounts following a bereavement claim. The operational failure was identified in December 2025 but reported to Ministers and publicised only in March 2026. The issues were resolved for current and new bereavement claims from January 2026, but I understand that the revised process is proving hard going and, in and of itself, is causing more delays. Can the Minister update us? As the noble Baroness, Lady Neville-Rolfe, said, some 34,000 estates, with a total value of £476 million, were affected by the original failure. Can the Minister tell us how many of the families of the bereaved have so far been reunited with their funds in full and have been compensated for the delay? What are the costs of compensation and associated fees that will fall on the taxpayer? I understand the pressures to resolve this issue, but frankly, when the Joint Committee on Statutory Instruments reports an SI as “requiring elucidation” on quite a number of points and for “defective drafting”, we really are talking about sloppiness, and that is not acceptable. NS&I is one of our most trusted financial institutions, holding over £240 billion belonging to some 24 million customers. It is crucial that it retains trust, which means that the response by NS&I and the Government needs to be both accurate and swift.
My Lords, I thank the noble Baronesses for their comments on what is a very important issue. To put it in some context, in March, the Minister for Pensions announced that National Savings & Investments had identified serious failings in its bereavement claims process, affecting thousands of estates. NS&I has rightly apologised to the families of the bereaved who were impacted and the Government have acted swiftly to ensure that those estates are reunited with the money they are owed. As the Minister for Pensions and NS&I set out in May, NS&I will reunite affected estates with the funds owed to them by mid-2027 and ensure that those estates receive compensation where it is appropriate to do so. The process of issuing letters, repayments and compensation to affected estates is now under way and Parliament has passed the necessary legislation to ensure that NS&I has the powers to undertake its remediation scheme. I turn to the details of the regulations referenced in the regret Motion. These regulations enable NS&I to pay compensation to affected estates above the de minimis. Specifically, they give NS&I the power to pay interest to estates for the entire period that their funds were wrongly disconnected from them. The funds will be adjusted upwards to include the higher of either the interest accrued since the error occurred or the Bank of England base rate plus one percentage point, in line with Financial Ombudsman Service principles. The regulations also give NS&I the power...
My Lords, I am grateful to the noble Baroness, Lady Kramer, for her support and to the Minister for his helpful response. I do not think he answered my question about when the first signs of this scandal first emerged-for example, in MPs’ correspondence. I recognise that that is a difficult question to answer, but I am grateful for the regular reports that he has promised. I do not wish to delay the establishment of the remediation scheme for vulnerable and bereaved families, which I obviously support. The money belongs to the affected estates, as the Minister said, and must now be returned, together with appropriate compensation and interest. It would therefore not be appropriate to divide the House. The important thing is to proceed with the mediation as quickly and comprehensively as possible. I beg leave to withdraw the Motion.
Motion withdrawn.