National Savings (Remediation Scheme) Regulations 2026

Lord Wilson of Sedgefield Excerpts

Wednesday 22nd July 2026 Lords Chamber

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

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 to make additional payments for other financial losses—for example, legal fees incurred because estates needed further administration as a direct result of NS&I’s error.

The regret Motion tabled by the noble Baroness, Lady Neville-Rolfe, covers two areas: the process for establishing the remediation scheme to repay claimants and, separately, the cost of that scheme. I will address each in turn, starting with the process for establishing the scheme. After the Treasury was notified about the serious failings in the bereavement claims process at NS&I in mid-December last year, officials worked at pace with NS&I to identify and address the root cause of the issue, to establish which customers were affected and to develop plans to reunite estates with the money. This was a substantial task, and NS&I, the Treasury and external advisers have worked closely to design and implement a remediation scheme which is effective, fair and meets regulatory standards. The parameters of this scheme were set out in May and the necessary regulations were then made on 10 June.

NS&I, supported by independent external advisers and expertise from across government, reviewed over 34 million customer accounts. Up to 34,000 estates have been affected, with a total value of approximately £367 million. These figures are likely to reduce and NS&I will provide an update in its quarterly progress report.

As for the root cause of the problem, as the Minister for Pensions set out in March, NS&I tracing processes failed to comprehensively trace accounts for some customers who passed away. The result of this failure is that not all savings were identified and paid to estates. NS&I has received written assurances from its customer-facing supplier and its previous supplier, Atos, that the cause of this underlying issue in their tracing of customer accounts has been addressed and will not affect customers going forward.

Several questions were asked, and I hope I can cover them all. I was asked when the remediation scheme will be delivered and how long it will take. NS&I aims to return holdings to their rightful owners as swiftly as possible and expects to complete its remediation programme in the first half of 2027. I was asked about the Treasury’s assessment of the overall cost of this programme. As NS&I is in the early stages of delivering the scheme, the expected costs to taxpayers are uncertain at this stage. Further information on expected costs will be included in NS&I’s annual report and accounts in the autumn. NS&I will be able to develop a clearer estimate as the programme progresses and more data becomes available on the average volumes and amounts of additional payments. The overall cost will also depend on the feasibility of recovering public money. NS&I will publish an update on progress, including payment of outstanding holdings, against its delivery plans on a quarterly basis.

The point of introducing the statutory instrument is to provide a clear, fair and consistent framework for customers to be reunited with the funds as quickly as possible. Without a scheme in place, the costs of handling potentially thousands of individual complaints and legal cases could significantly increase the operational burden, costs and legal fees for NS&I, and put pressure on the public finances. The Minister for Pensions said there will not be a cost to taxpayers as a result of the remediation scheme. In his Statement to the Commons, he challenged inaccurate reporting in the press that implied that the cost from returning money owed to estates would impact the taxpayer. This money is owed to these estates and will be repaid using funds provided through the National Loans Fund in the same way that funds would be transferred to a customer of NS&I wishing to make a withdrawal. These repayments are simply the return of customers’ funds and do not create any additional liability for the taxpayer.

I was asked about the existing budgets. As NS&I is in the early phase of delivering this scheme, the expected costs for taxpayers are uncertain at this stage, with further information to be provided in the NS&I annual report and accounts in the autumn. The Treasury and NS&I will together assess the feasibility of recovery costs associated with the scheme, but this is an extensive process and it will take time to make this assessment. There will also be operational costs of running the scheme and costs of compensation to affected estates where appropriate. This will be paid from NS&I budgets in the first instance and NS&I is expected to manage pressures within its budgets set at the spending review last year.

I end by reiterating the Government’s commitment to deliver redress for all those impacted by the serious failings in the NS&I bereavement claims process. The Government and NS&I have taken action to address these failings, to develop a plan to reunite customers with their money and to ensure that these failings can never happen again. The process of issuing letters, repayments and compensation to affected estates is now under way and the Government will continue to ensure that those impacted receive the support that they deserve. We take this very seriously and we want to see the money given back to those estates and the individuals who have been affected. This is an important issue and one that we want to solve as soon as possible.