NS&I Announces Major Compensation Scheme for Bereaved Customers
National Savings and Investments (NS&I), the Treasury-backed savings bank, is preparing to pay millions of pounds in compensation to customers following the discovery of significant operational errors. The bank has apologised after it was revealed that many bereaved families did not receive money they were owed, alongside reports of poor customer service. NS&I provides a range of savings and investments to over 24 million customers, including approximately 22 million Premium Bonds holders.
Scale of the Problem and Government Response
Pensions minister Torsten Bell informed the House of Commons that NS&I notified the Treasury of an operational failure to comprehensively trace accounts of some customers who had died. He stated: "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 trace some customer holdings that were spread across multiple profiles or systems.
The savings bank is now in talks with the Treasury to repay 37,500 savers whose money may have been misplaced. Through a review of over 34 million customer records, NS&I has identified that up to £476 million in deposits could be affected. Three-quarters of these cases relate to the period between 2008 and 2025. While this represents less than 0.2 percent of NS&I's customers, Bell emphasised that it is "still far too many."
Compensation Eligibility and Process
More details are expected to be laid out by NS&I in May about how missing funds will be returned, alongside possible compensation. It is not yet clear if money will be paid in compensation to those affected alongside the return of their missing funds. However, the bank has indicated that those affected may be compensated for the issue.
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." In its latest guidance, NS&I stated that families, beneficiaries, and deceased customers' estates do not need to take any immediate action, as the bank will contact affected estates directly.
Bell stressed that there is no need for individuals to waste money on claims management companies or solicitors, highlighting that the onus is on NS&I to contact people rather than the other way around.
Specific Cases and Broader Context
In one reported case, NS&I failed to inform the daughter of a deceased saver about her mother's bonds and also lost track of £2,000 in bonds she held herself. In another instance, NS&I allegedly refunded a woman's family for tax interest and legal costs after losing track of two accounts linked to an investment portfolio.
To address these issues, former HM Revenue and Customs boss Sir Jim Harra will replace Dax Harkins as the interim chief executive of NS&I to "provide a fresh start," according to Bell. This move comes as NS&I faces broader scrutiny; in February, the Public Accounts Committee expressed a lack of confidence in NS&I's ability to successfully deliver its £3 billion transformation programme designed to modernise operations. The committee warned of risks to NS&I's business and customers if the programme proves unsuccessful.
The bank is now undergoing a programme to reunite people with their cash, with the full extent of compensation and repayment processes to be clarified in the coming months.
