National Savings and Investments (NS&I) is set to pay millions of pounds to customers after a series of errors were discovered.
The Treasury-backed savings bank has apologised after it was revealed that many bereaved families did not receive money they were owed, alongside poor customer service.
The banking giant provides a range of savings and investments to over 24 million customers, including around 22 million Premium Bonds holders.
It is now undergoing a programme to reunite people with their cash, with up to £476 million in deposits being affected. The bank has also indicated that those affected may be “compensated” for the issue.
Many families of deceased savers have complained that NS&I withheld Premium Bond prizes from them, with some reporting that payments were delayed and investments lost.
The savings bank is in talks with the Treasury to repay 37,500 savers whose money may have been misplaced.
Pensions minister Torsten Bell told the House of Commons that NS&I notified the Treasury of an operational failure to trace accounts comprehensively of some customers who had died.
He said: “The result of this failure is that not all savings were identified by NS&I and paid to the beneficiaries of their estates as they should have been.
“Specifically, processes failed to comprehensively trace some customer holdings where those were spread across multiple profiles or systems.”
An NS&I spokesperson said: “We recognise that dealing with bereavement can be challenging and would like to apologise to anyone who has not received the customer service from NS&I that they should expect, particularly at such a sensitive time.”
Am I eligible for compensation?
More details are expected to be laid out by NS&I in May about how missing funds will be returned, alongside possible compensation, Mr Bell has confirmed.
It is not clear at this stage if money will be paid in compensation to those affected alongside the return of their missing funds.
The pensions minister told the Commons: “Since being notified, the Treasury has ensured external advisers including EY and legal experts have been engaged to identify the scale of these errors.
“Through this work, NS&I have reviewed over 34 million customer records.
“That work is ongoing, but it points to a maximum of around 37,500 customers with up to £476 million in deposits being affected.
“Three-quarters of cases relate to the period between 2008 and 2025.
“This number is likely to fall in future but while it represents less than 0.2 per cent of NS&I’s customers, it is still far too many.”
He added “there is no need for individuals to waste money on a claims management company or solicitor”, stressing the onus is on NS&I to contact people, rather than the other way around.
In its latest guidance, NS&I said: “NS&I apologises and is extremely sorry for these errors. It is working hard to ensure everybody affected is paid what is owed to them. Families, beneficiaries and deceased customers' estates do not need to take any immediate action. NS&I will contact estates that are affected and will publish further information for the beneficiaries of those estates in due course.”
In one case, NS&I reportedly failed to tell the daughter of a deceased saver about her mother’s bonds, and also lost track of £2,000 in bonds she held herself, she told The Telegraph.
In another case, NS&I allegedly refunded a woman’s family for tax interest and legal costs after it lost track of two accounts linked to an investment portfolio.
Former HM Revenue and Customs (HMRC) boss Sir Jim Harra will replace Dax Harkins as the chief executive of NS&I on an interim basis to “provide a fresh start”, Mr Bell said.
NS&I was also under the spotlight in February, when the Public Accounts Committee (PAC) said it was not confident about NS&I’s ability to successfully deliver its transformation programme, which was designed to modernise NS&I’s operations.
Total costs of the programme hit an estimated £3 billion in 2024, and NS&I was overconfident about its ability to deliver it, the committee said.
The spending watchdog said there were risks to NS&I’s business, and especially its customers, if the programme is unsuccessful.
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