Do you need probate for Premium Bonds?
Only if the total held with NS&I, across Premium Bonds and every other NS&I account, was more than £5,000. Under that, NS&I pays out on a death certificate and a claim form.
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The short answer
- NS&I's limit is £5,000, counted across all the person's NS&I holdings together: Premium Bonds, Income Bonds, Direct Saver and the rest.
- At or under £5,000, NS&I repays on a completed claim form and the death certificate. No grant.
- Over £5,000, NS&I asks for the grant of probate or letters of administration before it will pay.
- Bonds cannot be inherited as bonds. They are cashed in and the money paid to the estate. They stay in the prize draw for 12 months after death.
- The £5,000 limit is much lower than a bank's, so Premium Bonds are a common reason an otherwise simple estate needs a grant.
The NS&I rule
National Savings and Investments applies one limit to everything a customer held with it. If the total at the date of death was £5,000 or under, NS&I will repay the holdings to the person entitled on receipt of its death claim form and a death certificate, without a grant. If the total was over £5,000, NS&I requires a grant of probate or letters of administration, and will not pay until it has seen it.
The figure is NS&I's own policy rather than law, and it has been £5,000 for many years while the banks' limits have risen to around £50,000. That gap is why Premium Bonds so often decide the question. A widow whose late husband's only sole-name asset was £12,000 of Premium Bonds needs a grant for that reason alone.
NS&I can tell you the total if you do not know it. Its tracing service will search for holdings in the deceased's name, which is worth doing in any case: old Premium Bonds and savings certificates are among the most commonly forgotten assets.
What happens to the bonds
Premium Bonds cannot be transferred to a beneficiary; they are always cashed in. But they remain eligible for prize draws for 12 months after the date of death, and any prizes won in that period are paid to the estate. For that reason some families choose to leave the bonds in place until the year is up, rather than cashing them immediately. NS&I will do either, on instruction.
Prizes won before death but not yet paid are also owed to the estate. Ask NS&I to check for unclaimed prizes when you make the claim.
How to claim
- Tell NS&I using its online death notification, by post or by phone. It will freeze the holdings and send, or let you download, the claim form.
- Complete the claim form. Under £5,000, the form is signed by the person entitled (the executor named in the will, or the closest relative under intestacy). Over £5,000, it is signed by the personal representative and returned with the grant.
- Send the death certificate. An original or a certified copy; NS&I returns it.
- Choose what to do with the bonds: cash in now, or hold for up to 12 months for the draws.
NS&I typically pays within a few weeks of receiving a complete claim. Payment is by bank transfer to the estate's account or the executor's account, or by cheque.
The other NS&I products
The same £5,000 limit and the same claim form apply to Income Bonds, Direct Saver, Direct ISA, Savings Certificates, Guaranteed Growth and Income Bonds, and the old Investment Account and Ordinary Account. Savings Certificates and Guaranteed Bonds may have terms that continue to run after death; NS&I will explain the options in its reply. Its Direct ISA follows the ISA rules on death, and a surviving spouse has an additional permitted subscription: see ISAs.
Common questions
What is the Premium Bonds probate threshold?
£5,000, counted across all the person's NS&I holdings together. If the total was £5,000 or under, NS&I pays out on a claim form and the death certificate. If it was over £5,000, NS&I requires a grant of probate or letters of administration before it will pay.
Can Premium Bonds be transferred to a beneficiary?
No. Premium Bonds cannot be passed on in the name of the holder; NS&I cashes them in and pays the money to the estate. The bonds stay in the prize draw for 12 months after death, and the estate can choose to leave them in until then.
Do Premium Bonds still win prizes after death?
Yes, for 12 months from the date of death. Any prizes won in that period belong to the estate. After 12 months the bonds are no longer eligible and NS&I repays them.
Why do I need probate for Premium Bonds when the bank didn't ask for it?
Because each organisation sets its own limit. Most large banks release up to around £50,000 without a grant. NS&I's limit is £5,000. If the person had, say, £20,000 of Premium Bonds, NS&I will insist on a grant even though the bank did not, and the grant then has to be obtained for the whole estate.
How do I find out if someone had Premium Bonds?
Ask NS&I to trace holdings in the deceased's name. Its tracing service is free and searches all NS&I products. You can also use the My Lost Account service, which covers NS&I as well as banks and building societies.
How long does NS&I take to pay out after a death?
Usually a few weeks from receiving a complete claim form and the death certificate, or the grant where the holdings were over £5,000. Payment is made by bank transfer or cheque to the estate.
Related guides
Important
Solace is not a firm of solicitors and does not provide legal, tax or financial advice. We are an estate administration service and we are not regulated by the Solicitors Regulation Authority, the Financial Conduct Authority or any equivalent body. Nothing in this guide constitutes legal, tax or financial advice, and no solicitor–client relationship is created by reading it.
This article is general information only. It reflects the position in England and Wales at the date shown above; the law and the figures change, and Scotland and Northern Ireland differ in important respects. It may not apply to your circumstances. Whether a particular estate needs a grant is ultimately decided by the organisations holding the assets, and their limits change. Administering an estate carries personal legal responsibility, and you should obtain advice from a qualified solicitor, accountant or other regulated professional where appropriate. Always check current rates, fees and deadlines against GOV.UK before acting.