Advertisement
UK markets close in 48 minutes
  • FTSE 100

    8,159.82
    -38.96 (-0.48%)
     
  • FTSE 250

    21,070.78
    -67.90 (-0.32%)
     
  • AIM

    780.55
    -2.69 (-0.34%)
     
  • GBP/EUR

    1.1906
    +0.0034 (+0.29%)
     
  • GBP/USD

    1.2917
    -0.0016 (-0.12%)
     
  • Bitcoin GBP

    52,094.67
    +146.67 (+0.28%)
     
  • CMC Crypto 200

    1,376.03
    -9.23 (-0.67%)
     
  • S&P 500

    5,573.25
    +8.84 (+0.16%)
     
  • DOW

    40,441.08
    +25.64 (+0.06%)
     
  • CRUDE OIL

    79.95
    +0.17 (+0.21%)
     
  • GOLD FUTURES

    2,406.80
    +12.10 (+0.51%)
     
  • NIKKEI 225

    39,594.39
    -4.61 (-0.01%)
     
  • HANG SENG

    17,469.36
    -166.52 (-0.94%)
     
  • DAX

    18,528.58
    +121.51 (+0.66%)
     
  • CAC 40

    7,576.06
    -45.96 (-0.60%)
     

‘My late mother has £180,000 in savings – her banks refuse to pay interest’

Jeff Pudney
Jeff Pudney has 'been on the phone crying to companies' after his banks' unhelpful responses following his mother's death - Jay Williams

When Jeff Pudney’s mother died in April, he discovered £177,000 sitting in current accounts in her name earning no interest.

Dismayed by this, he wrote to all the banks asking that they move her money into interest-bearing accounts. All three banks gave different answers – some helpful, and some downright infuriating.

Mr Pudney claims he has been failed by “banks picking and choosing their policies”, especially at a time when he is grieving.

HSBC agreed to move £84,000 into a flexible saver account straight away, paying 2pc interest. But NatWest refused to move the £76,000 she had with them until Mr Pudney had grant of probate, as did Nationwide, concerning the remaining £16,441.

ADVERTISEMENT

Probate is a legal document which allows a family to sell their loved one’s house and unlock their inheritances.

“We’ve been told probate could take six months or more,” said Mr Pudney. “So in the meantime, the banks’ bereavement policies mean this money will not earn any interest and in real terms will decrease in value.

“While it’s not the banks’ fault that probate is now taking so long, they are effectively borrowing money from the beneficiaries and not paying a return. They haven’t justified their policy.

“Back in the day, if a personal bank manager saw all that money in a current account they would suggest moving it into a savings account. You’d think any financial institution that claims to have a bereavement team would be on your side.”

After The Telegraph got in contact with NatWest and Nationwide, it transpired that Mr Pudney had been given two separate pieces of misinformation by one of the bank’s call handlers.

NatWest told him he could not move his mother’s £76,704 to an interest-bearing account until probate was done, and that the bank had a policy where anything over £50,000 had to stay put.

But the bank then changed its mind again, and told The Telegraph it was “making arrangements to move the money to an interest-bearing account”. The bank’s flexible saver pays a 2.25pc interest rate on balances up to £99,000.

A NatWest spokesman added: “We’re sorry that we didn’t resolve this for Mr Pudney at the first point of contact, particularly at this difficult time.”

Mr Pudney also needed to pay the first tranche of his mother’s inheritance tax bill to HMRC. NatWest had told him that his mother’s current account could not be used to pay such a bill as it is locked until probate is granted – but this wasn’t right either.

He later received an email from a different employee which read: “I regret that you were misinformed earlier today about our policy on inheritance tax, which I loathe to acknowledge is becoming a trend in this case.”

When Nationwide refused to move his mother’s £16,441 into a interest-bearing account, Mr Pudney tried to lodge a complaint but staff never bothered to log it. The bank has now paid him £150 in compensation for this.

They then also told him they could not move his mother’s money, because the balances she held with them exceeded £50,000. Alongside the £16,400 earning no interest, she also had nearly £75,000 already in interest-bearing accounts.

A Nationwide spokesman said they were sorry to hear of the death of their customer’s mother, adding: “As the balances of her accounts exceed £50,000, they remain frozen until we receive the grant of probate. While we sympathise with her son’s situation, we are legally unable to act on his instructions until we can confirm he is the personal representative for his mother estate.”

In response, Mr Pudney said: “It’s not about the money. I haven’t earned it. It’s about banks picking and choosing their policies. This isn’t law.

“We’re also at a point in time where a family is suffering from emotional distress. I’ve been on the phone crying to companies over the past two months.”

The Telegraph understands that the Financial Conduct Authority does not have powers to standardise banks’ different limits before requiring probate – and that it is ultimately up to banks.

The Ministry of Justice says people are waiting more than nine weeks on average for a grant of probate. But in 2023, almost 1,500 families faced delays of a year or more, according to data obtained in a Freedom of Information request. Mr Pudney has been told his case could take six months.

Since May, grieving families have faced a 10pc increase in the cost of applying for a grant of probate. This is in spite of the fact the number of families waiting 21 to 23 months also leapt up by 65pc between 2020 and 2023.

Mr Pudney said: “We’re in limbo now. The revenue has no incentive to process these things quickly. And if you fail to pay within the first six months then the interest is ludicrous.”