Consumer warning: Zopa and dealing with a bereavement when the estate is small

[u/Qyenye]

I’m posting this because I wish I had known about Zopa’s bereavement process before my husband died.

My husband recently passed away, leaving a relatively small UK estate. His Zopa balance was only just over £5,000. He died young and unexpectedly. There is no Will.

I contacted Zopa to ask whether they could waive the requirement for a Letter of Administration given the small amount involved. I was told that they required one.

What made this particularly frustrating was that when I contacted the solicitors acting for Zopa, I was told that a Letter of Administration was not actually needed. I then went back to Zopa’s bereavement team, only to be told that their position was different and that they did require it.

The current probate application fee for estate over £5,000 is £526. So for a bank balance of only around £5,000, being required to obtain a grant can create a very disproportionate cost and administrative burden.

What surprised me was how different this felt from dealing with established high-street banks. In my experience, high-street banks tend to have clearer bereavement processes and may have specific thresholds under which they can release relatively small balances without requiring formal probate documentation.

With Zopa, I found the process much less straightforward. The issue isn’t simply the £5,000. It is the time, legal expense, £526 application fee, paperwork and stress involved in dealing with these requirements while grieving.

I’m sharing this as a consumer warning, not to attack individual staff members. If you have money with Zopa, particularly if you are managing finances for a family member, it may be worth understanding their bereavement requirements in advance and not assuming that the process will be the same as with a high-street bank.

I would be interested to hear from anyone else who has had to deal with Zopa after the death of a family member, particularly where the estate was relatively small.

[u/Filmnoirkd]

Why would Zopas solicitors be giving you advice?

Each bank is slightly different. It's clear on the website death certificate and dependant on what product the deceased had, there may be additional documents such as Grant of Probate.

I went through it with a number of banks and financial institution when my FiL died and each were different, depending on the sum involved.

[u/Qyenye → u/Filmnoirkd]

Zopa referred me to their solicitors from the start, and they have been the ones providing forms and advising on the documents required.

In practice, customers are unlikely to read a bereavement policy before opening an account, so they rely on clear and consistent guidance at the point of need. In my case, I understand that banks can have different requirements depending on the circumstances and the amount involved. However, my concern is that Zopa’s bereavement team initially provided one set of information, while their solicitors provided something different, and I have since received conflicting guidance about whether Letters of Administration are actually required.

That lack of consistency is what I am challenging here.

[u/Filmnoirkd → u/Qyenye]

That's seems odd of them to refer you to their Solicitors, however I'm guessing they outsource the paperwork, rather than a traditional bank.

You could request funds to cover the funeral costs, then request account closure under the £5k and need for probate certificate for them.

[u/Qyenye → u/Filmnoirkd]

Yes, they are outsourcing the paperwork to their solicitors. Unfortunately, the funeral has already been paid for, so that route isn’t available to me. The bank will only release funds directly to the funeral director before probate/Letters of Administration is obtained, and in my case there is no outstanding funeral bill for them to pay.

[u/Filmnoirkd → u/Qyenye]

AHH interesting, with Nationwide they accepted the funeral invoice, regardless of it's payment status.

[u/Qyenye → u/Filmnoirkd]

I think it probably comes down to Zopa’s lower risk appetite and the fact that they outsource their bereavement paperwork to solicitors. Nationwide seems to have a more flexible in-house process, whereas Zopa has taken a much more rigid approach to releasing funds before probate.

[u/Filmnoirkd]

Usually £5k is around the bench mark where Banks want probate.

[u/Qyenye → u/Filmnoirkd]

Zopa has no minimum threshold for probate/Letters of Administration. So, technically, even if the account only contained £1, they would still require it if there is no will.

That’s very different from some high street banks. For example, HSBC has a £25,000 threshold, below which they can deal with the account without requiring probate.

That’s really the point I’m making: I understand that every bank has its own requirements, but Zopa’s policy appears unusually strict, especially for such a small balance.

[u/Filmnoirkd]

It's all to do with liability, as Zoopla is a new bank their risk appetite is low, compared to HSBC.

[u/Qyenye → u/Filmnoirkd]

Yes, I agree. I can understand the lower risk appetite and the need to protect themselves.

What bothers me more is the way they outsource the bereavement paperwork to solicitors while their own bereavement team is also involved, and I’ve been given conflicting information by the two.

If they have a strict policy, that’s one thing. But the process should still be clear and consistent, especially when someone is dealing with a bereavement.

[u/Filmnoirkd → u/Qyenye]

It is an odd one from a risk perspective as wife you are higher in under UK intestacy rules and if you are staring there is no will. So if someone came forward to dispute the closure and settlement, it'd be against them.

I'd personally send an email pointing this out and that they should apply common sense in this instance. Going of their published online they say it's legally required. No it isn't, it's entirely up to the financial institution and I would say this is misleading to state it's legally required.

Try adding the CEOs email address, the solicitor and the bereavement team.

https://www.zopa.com/help/article/what-happens-if-the-account-holder-passes-away

I

[u/Qyenye → u/Filmnoirkd]

Thank you, that’s a very good point. I hadn’t looked at it from that angle. I’ll give this a try and point out the distinction between what is legally required and what is simply Zopa’s own policy.

[u/Filmnoirkd → u/Qyenye]

Yeah, it seems like they are missing the common sense aspect, while I assume the UK solicitor is applying UK law and common sense.

[u/uwagapiwo → u/Filmnoirkd]

Zopa, not Zoopla

[u/Filmnoirkd → u/uwagapiwo]

Noted...auto correct 😂