Millions in Savings Potentially Affected by National Savings and Investments Blunders
National Savings and Investments (NS&I), a cornerstone of the UK’s savings landscape, is preparing to compensate a significant number of its customers following a series of serious administrative errors. The state-backed institution has been accused of failing to properly manage investments for bereaved families, leading to delays in payouts and, in some instances, withholding prizes from Premium Bonds.
The scale of the issue is substantial, with NS&I estimating that up to 37,500 bereavement claims, collectively holding an estimated £476 million in customer deposits, may have been impacted by these failings. The seriousness of the situation has led to the dismissal of NS&I’s chief executive, Dax Harkins, with Sir Jim Harra appointed on an interim basis to steer the organisation through this challenging period.
Government Intervention and Compensation Promises
In a statement to the House of Commons, pensions minister Torsten Bell outlined the government’s commitment to rectifying the situation. He assured Parliament that the appropriate compensation would be paid to all affected customers. The government’s strategy is focused on three key priorities:
- Addressing the Root Cause: Identifying and resolving the underlying issues that led to the failure in tracing customer details.
- Reuniting Beneficiaries with Funds: Ensuring that beneficiaries of deceased customers receive any funds held by NS&I, including any rightful compensation.
- Completing Business Transformation: Continuing with NS&I’s ambitious business transformation programme, which aims to modernise the organisation’s operations.
The Treasury was alerted to the problem in December of last year, when it was revealed that NS&I had failed to trace the details of accounts belonging to some deceased customers. The majority of these cases, approximately three-quarters, date back to the period between 2008 and 2025.
NS&I will be proactively contacting all affected customers. The responsibility for identifying these individuals and resolving the issues lies with NS&I, not the customers themselves. Crucially, the minister confirmed that the financial burden of these compensation packages will not fall upon British taxpayers, as the plans do not represent an additional liability for the public purse.
A Detailed Delivery Plan Forthcoming
NS&I is required to publish a comprehensive delivery plan in May, detailing its strategy for reuniting lost funds with their rightful owners. The plan will also outline the approach to compensation, which will be awarded where deemed appropriate. While specific figures for the compensation levels have not yet been disclosed, it is understood that much of the payout will involve the repayment of funds that customers were not fully owed. In addition, some compensation will be provided to acknowledge the distress and inconvenience caused.
Compensatory interest may also be included in payouts for certain cases, particularly for more complex situations, which will be assessed on a case-by-case basis. The pensions minister reassured the public that all affected customers’ money remains safe and secure.
Addressing Tax Implications and Support for Families
The minister acknowledged that these errors could have tax implications for some affected estates. The Treasury is actively exploring ways to provide support to bereaved families to mitigate any disproportionate disruption and administrative costs they may incur as a result of these blunders. Further details on this support are expected to be included in NS&I’s upcoming delivery plan.
In its own statement, NS&I reiterated its commitment to ensuring that customers’ estates are appropriately compensated, with more information to be released in May. The institution admitted that the errors occurred because the search process used during bereavement claims failed to identify all NS&I products. The problem has since been rectified for current and new claims, with robust measures implemented to prevent recurrence.
Rebuilding Trust and Modernisation Efforts
NS&I has taken steps to address the crisis, including establishing a dedicated programme team and hiring an additional 100 staff members. Sir Jim Harra will also conduct a review to investigate how these failings were allowed to persist, especially after the bank had reportedly been warned about missing customer accounts.
The organisation has faced criticism regarding its £3 billion modernisation programme, which is reportedly years behind schedule. This extensive digital transformation project, aimed at modernising operations and reducing running costs, has been met with scepticism from a committee of MPs, who expressed concerns about the lack of a workable plan and the bank’s perceived lack of skills to deliver it.
NS&I serves over 24 million customers, including more than 22 million Premium Bonds holders. Premium Bonds are a popular savings product where bond holders are entered into a monthly draw for tax-free cash prizes, with two lucky winners each receiving £1 million.
NS&I has issued an apology to customers who have experienced issues during a bereavement, acknowledging the sensitive nature of such times and expressing regret for any customer service failures.
Full NS&I Statement
NS&I has identified an issue where the estates of deceased customers were not always repaid money from all of their accounts following a bereavement claim. These errors occurred because the search process used when handling a bereavement claim failed to identify all NS&I products. The issue has been resolved for current and new bereavement claims, and robust measures have been introduced to ensure this does not happen again. NS&I apologises and is extremely sorry for these errors.
The institution is working diligently to ensure everyone affected is paid what they are owed. Families, beneficiaries, and the estates of deceased customers do not need to take any immediate action. NS&I will contact affected estates and will publish further information for beneficiaries in due course.
NS&I estimates that up to 37,500 bereavement claims, with a total value of up to £476 million in customer deposits, may have been affected. Despite this issue, NS&I received 211,800 new bereavement claims in 2025, repaying £4 billion. This represents approximately two million bereavement claims over the past decade.
NS&I will ensure customers’ estates are appropriately compensated, with more details to be published in May. The Minister for Pensions, Torsten Bell MP, has announced the appointment of Sir Jim Harra, former HMRC First Permanent Secretary, as interim Chief Executive of NS&I to provide a fresh start for the organisation’s next phase of development.
