This week, the National Savings & Investment (NS&I) chief executivewas forced to resign amid a scandal over lost funds.
Dax Harkins stepped down after it emerged the state-owned savings bank owes nearly £500 million to bereaved families across the UK.
An estimated 37,500 people were unable to access their deceased relatives’ Premium Bonds deposits and prize money, in some cases for years on end.
According to Pensions Minister Torsten Bell, NS&I notified the Treasury in December of ‘operational failures’ in tracing withheld assets totalling £476 million.
Following an investigation, Bell told MPs the cause of the issue had now ‘been addressed’, and affected customers would receive compensation ‘where appropriate’.
He called the decision to replace Harkins with former HMRC boss Sir Jim Harra a ‘fresh start’, adding that additional staff had also been brought on to help track and deliver the missing savings, including interest.
‘These deposits belong to customers,’ Bell continued. ‘Returning them in no way presents an additional liability to the taxpayer.’
What went wrong at NS&I ?
NS&I, originally set up in 1861 as the Post Office Savings Bank, has been accused of mishandling funds in its popular Premium Bonds accounts.
More than 22 million of its 24 million customers hold Premium Bonds, which are 100% guaranteed by the government.
In a recent Daily Telegraph report, bereaved families shared how they’d spent years trying to withdraw cash left in their late loved ones’ accounts, with some even paying lawyers to recover it.
It was claimed NS&I had lost track of the assets because the search process used when handling bereavement claims failed to identify all of its products.
‘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,’ a spokesperson from the bank said in a statement.
What do you think about the handling of the NS&I missing funds scandal?
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It was poorly managed and needs strict reforms.
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Mistakes happen, but they are working to correct them.
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I’m indifferent or don’t have enough information.
This follows criticism from parliament’s spending watchdog, which called NS&I’s £3bn modernisation programme a ‘full-spectrum disaster’.
The Public Accounts Committee said ‘Project Rainbow’ — initially planned to cost £1.3bn — had exposed taxpayers to ‘unacceptable risk’ and resulted in ‘little transformation’.
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Could you be due NS&I compensation?
After a review of more than 34m customer records, NS&I has established that up to 37,500 bereavement claims with a total value of up to £476m were likely affected, three-quarters of which are from between 2008 and 2025.
Although the government confirmed impacted customers would be remunerated, exact details of the compensation scheme haven’t yet been announced.
Pensions minister Torsten Bell told Commons that he has asked NS&I to publish a delivery plan in May, which will ‘cover the number of cases, how NS&I will proactively contact representatives of estates to ensure they receive the funds they are due, including interest on savings, and the compensation that, where appropriate, will be paid.’
He said NS&I would be responsible for contacting beneficiaries, adding: ‘There is no need for individuals to waste money on a claims management company or solicitor.’
The amounts offered to those who had already pursued legal action to access their funds, or experienced other consequences as a result of the money being withheld, will be assessed ‘on a case-by-case basis’.
In the meantime, NS&I has been told to make it simpler for people to search for all accounts they might hold, with existing customers assured that all deposited cash is ‘100% safe’.
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