The National Savings and Investments (NS&I) lost funds scandal is entering its 'we guess we should probably give the money back' phase, as the government-backed bank announced it will begin contacting affected bereaved families in the coming weeks.

Turns out, the bank had some trouble figuring out exactly which products deceased customers held, resulting in thousands of grieving families not receiving all the money their loved ones had stashed away. Some 34,000 estates were shortchanged to the tune of £367m - enough to make anyone roll over in their grave.

The former boss of NS&I already resigned over this mess in March, presumably after realizing that 'government-backed' doesn't mean 'immune to accountability.' Now, the bank says it will contact all affected estates with holdings of £10 or more to 'reunite them with the full value of those holdings.' Because nothing says 'we care' like a minimum threshold for returning your dead relative's money.

Payments will start dribbling out in the coming months, with full payout expected by the first half of next year. The bank is even offering interest - either what accrued since the error or the Bank of England base rate plus one percentage point, whichever is higher. And in a rare display of tax mercy, the funds will be exempt from inheritance and income tax.

Affected families, beneficiaries, and executors can sit back and relax for now - NS&I says they don't need to do anything at this stage. Which is good, because some of them have already spent years doing everything. Take Jennifer Brough, 82, from Doncaster, who spent six months trying to access her husband's savings after his death in 2024. NS&I demanded a grant of probate despite her solicitor saying it wasn't needed. 'They would not release the money until I produced this,' Jennifer said. 'I found this very hard.'

Or Rhona Edwards, whose husband Alex passed away in November. After completing all the paperwork to release his £50,000 in premium bonds, she was still waiting by March, unable to finalize Alex's estate. Nothing like a good bureaucratic limbo to honor the deceased.

NS&I, which serves 24 million customers with products like premium bonds, has always sold itself on security - savings guaranteed by the government. But for bereaved families, that guarantee came with a side of multiple forms, endless phone calls, and great distress. Some even had to hire lawyers, adding insult to injury.

Sir Jim Harra, the interim chief executive, offered an apology and promised to put things right. 'We have brought in additional staff to get the service back on track,' he said. Because when you've accidentally hoarded £367m from dead people, the solution is clearly more staffing.