Tens of thousands of NS&I customers are expected to receive compensation running into hundreds of millions of pounds over a major missing savings blunder.
NS&I (National Savings and Investments), a state-owned bank best known for premium bonds, has been a source of trust for savings since 1861. Premium bond prizes and odds of winning are set to be cut again from next month.
Concerns have been raised about admin errors, which have meant that some bereaved families have not received funds that they claim were rightfully theirs. The claims are also said to date back many years.
NS&I has apologised following the claims and has held talks with the Treasury over repaying more than 37,000 savers whose funds have been affected by failures.
A 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.”
“NS&I apologises and is extremely sorry for these errors.”
A statement added: “NS&I will contact estates that are affected and will publish further information for the beneficiaries of those estates in due course. NS&I estimate that up to 37,500 bereavement claims with a total value of up to £476m in customer deposits may have been affected. Notwithstanding this issue, in 2025, NS&I received 211,800 new bereavement claims and repaid £4bn This equates to in the region of two million bereavement claims over the last ten years.”
Pensions minister Torsten Bell has appointed Sir Jim Harra, a former HMRC executive, to take over as CEO on an interim basis. Dax Harkins, who was chief executive sine March 2023 was ousted today.
Zoe Gillespie, investment manager at RBC Brewin Dolphin, told the BBC Today programme: “The NS&I is currently working through a £3bn modernisation programme which is years behind, so there appears to be some issues with potential tech or customer service problems.”
So far, these look like administrative failures rather than anything more sinister, but public perceptions of previously trusted institutions have been dented, not least by the Post Office IT scandal.
NS&I was originally set up as the Post Office Savings Bank.
It has 24 million customers, of which 22 million are premium bond holders who hope to win money from monthly prize draws.
In many cases, NS&I seems to have simply lost track of customer accounts.
Since it is state-owned, the Treasury will be on the hook for the compensation. NS&I chief executive Dax Harkins faces some difficult conversations with chancellor Rachel Reeves, whose department has oversight of the savings bank.