What Happens to Savings When Someone Dies UK (2026)? Bank Accounts, ISAs & NS&I

Bank and building society savings accounts — including instant access accounts, notice accounts, fixed-term bonds, and regular savings accounts — all become part of the deceased's estate on death: (1) Account frozen: once the bank is notified of the death, all accounts held solely in the deceased's name are frozen. No withdrawals can be made. The account continues to earn any contractual interest but cannot be operated; (2) Notification: the fastest route is the Death Notification Service (DNS) at deathnotificationservice.co.uk — a free service that notifies multiple banks and financial institutions simultaneously using a single notification. Alternatively, notify each institution individually with an official copy of the death certificate; (3) Probate threshold: banks set their own threshold below which they will release savings without requiring a grant of probate. Thresholds vary widely (typically £5,000–£50,000) — some banks now release much larger amounts on sight of the death certificate and executor's letter of authority. Check with each bank individually for their current policy. Above their threshold, the bank requires the original grant of probate before releasing funds; (4) IHT valuation: the date-of-death balance of all savings accounts must be declared to HMRC as part of the estate valuation. Request written confirmation of the date-of-death balance from each institution — they are obliged to provide this; (5) Fixed-term bonds and notice accounts: early closure penalties may apply if the bond is cashed before maturity. However, most banks waive early closure penalties on death — confirm with the specific institution. Notice periods are typically waived for estates; (6) Release: once probate is obtained, the executor contacts each bank with the grant to release the balance into the estate bank account.

A cash ISA has specific post-death rules that are more favourable than an ordinary savings account in some respects, but different in others: (1) ISA wrapper ceases at death: the ISA tax-free status terminates at the date of death. The account becomes a 'Continuing Account of a Deceased Investor' (CADI) — the ISA wrapper continues for a limited period (either until the estate is wound up, or 3 years from the date of death, whichever is earlier). During this CADI period, any interest earned inside the former ISA remains tax-free; no new subscriptions can be made; (2) IHT applies to ISA contents: contrary to a common misconception, ISA savings are NOT exempt from inheritance tax. The full balance at the date of death is included in the taxable estate at the date-of-death value. The ISA wrapper provides income tax efficiency during the account holder's life but offers no IHT shelter; (3) Additional Permitted Subscription (APS) for surviving spouse or civil partner: the surviving spouse or civil partner can claim an APS — a one-off additional subscription allowance equal to the value of the deceased's ISA, in addition to the normal £20,000 annual ISA allowance. The APS can be used within 3 years of the death, or 180 days after the estate administration ends, whichever is later. The APS is funded by the surviving spouse's own money — they do not need to inherit the actual ISA funds; it is a right to subscribe more, not a transfer of the ISA itself; (4) Probate: the cash ISA provider will typically require the grant of probate before releasing the balance to the estate, above their threshold.

National Savings and Investments (NS&I) operates specific rules for all its products on the account holder's death: (1) Registering the death with NS&I: notify NS&I at nsandi.com or by post to NS&I, Glasgow, G58 1SB, with a certified copy of the death certificate. The account is then placed in a restricted state; (2) Premium Bonds: Premium Bonds are held for a period of 12 months after the date of death. During this 12-month period, the bonds continue to be entered in the monthly prize draw, and any prizes won are paid to the estate. After 12 months, the bonds must be encashed — they cannot be transferred to a beneficiary (unlike other estate assets). The full capital is returned to the estate (Premium Bonds cannot lose their face value). The NS&I prize fund interest rate effectively disappears once the bonds are encashed; (3) NS&I savings certificates (fixed interest and index-linked): these continue to earn interest until maturity. The executor can cash them in early (with or without the penalty depending on the certificate terms) or hold them to maturity. They are NS&I's sole products that can be transferred to a beneficiary rather than cashed; (4) NS&I Direct Saver and NS&I Income Bonds: treated similarly to bank savings accounts. NS&I may release small balances without probate (currently up to £5,000 for each NS&I product). Above this, they require the grant of probate; (5) The My Lost Account service: if you are unsure whether the deceased held NS&I products, search at mylostaccount.org.uk — NS&I is one of the participating institutions; (6) IHT: all NS&I savings at the date of death are estate assets and included in the taxable estate at face value.

Joint savings accounts have different rules from sole savings accounts on death, because of the right of survivorship: (1) Joint accounts pass to the surviving holder: savings accounts held jointly (both account holders named, with right of survivorship — which is the standard arrangement for joint accounts) pass automatically to the surviving account holder on the first death. The surviving holder immediately has full access to the account. No probate is required for the joint account itself; (2) The account is NOT frozen: unlike a sole account, a joint account is not frozen on the first death. The surviving account holder retains full access from the moment of death. The bank will update the account to show the sole survivor once notified of the death; (3) IHT on the joint account: for IHT purposes, the proportion of the joint account that belonged to the deceased must be included in the taxable estate. For a joint account between spouses (funded primarily by one of them), HMRC treats the full balance as belonging to the contributing spouse. For accounts funded jointly, HMRC typically treats 50% as belonging to the deceased. The surviving spouse exemption (IHTA 1984 s.18) applies to any IHT liability on the joint account passing to a surviving spouse or civil partner; (4) Joint accounts with more than one survivor: the standard joint account with two holders works as described above. Joint accounts with three or more holders (less common) pass to the remaining holders on each death until the last survivor; (5) The final survivor's death: when the last joint account holder dies, the account falls into their estate and the normal sole-account rules apply — frozen on death, probate required above the bank's threshold.

Fixed-rate bonds (fixed-term deposits) and notice accounts require particular attention from the executor: (1) Fixed-rate bonds: a fixed-rate bond (also called a fixed-term deposit) locks in the savings for a set period (typically 1–5 years) at a fixed interest rate. On the account holder's death: (a) the bond matures at its contractual date — the executor can wait for the maturity date to receive the full capital and all interest; (b) early closure: most banks and building societies waive the early withdrawal penalty (typically a loss of a portion of interest) on death as a compassionate gesture. This is not a legal right — it is bank policy. Check the specific institution's policy. Some providers allow early closure immediately; others require a waiting period; (c) the executor should request written confirmation of the current balance and any accrued interest at the date of death for the IHT valuation; (2) Notice accounts: a notice account requires a specified number of days' notice (typically 30, 60, 90, or 120 days) before a withdrawal can be made. On death: most banks waive the notice period and allow immediate closure of a notice account held in a deceased's name. Some may require completion of their standard bereavement process first; (3) Challenger banks and online savings platforms (Monzo, Starling, Marcus, Atom Bank): these operate under the same legal rules but have different bereavement processes. Most now have dedicated bereavement teams and online processes. Confirm each institution's specific process; (4) Interest earned after death: interest that accrues between the date of death and the date the account is closed is income of the estate (not the deceased's income). The executor may need to declare this as estate income in an SA900 Trust and Estate Tax Return if total estate income exceeds £500 and the administration spans more than one tax year.