Brits 'owed hundreds of millions' after NS&I mistakes
Thousands of Brits could be owed a portion of a payout worth hundreds of millions from the government-backed bank National Savings and Investments (NS&I).
On Tuesday the Daily Telegraph reported that NS&I had been accused of losing track of investments, delaying payouts and withholding premium bond prizes from bereaved families.
They report that some families have had to seek legal assistance to get the help they needed in securing money that was theirs, with complaints about errors made going back years, and that the amount owed to Brits could be around £400 million.
The bank, which has 24 million customers, yesterday apologised to bereaved families, and they are expected to pay hundreds of millions of pounds after speaking to the Treasury about repaying the approximately 37,000 people affected.
Advert
NS&I said yesterday in a statement: "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."
Today they said: "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 happened 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. 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.
"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.
"Notwithstanding this issue, in 2025, NS&I received 211,800 new bereavement claims and repaid £4 billion. This equates to around two million bereavement claims over the last ten years.
"NS&I will ensure customers’ estates are appropriately compensated. More details will be published in May."
Addressing the House of Commons today about the matter, Pensions Minister Torsten Bell said NS&I warned the Treasury on 18 December last year that it had failed to trace the account details of some customers who had passed away.
He said this meant not all savings and investments of those who died had been passed onto their families 'as they should've been', and that it was 'now clear' the NS&I and others hadn't acted properly on warnings.
Bell said the issues affected 0.2 percent of NS&I's customers, but it was 'still far too many'.
"It is right that NS&I is apologising today," he told the Commons as he said the priority now should be addressing the causes of the problem, reuniting people with the money they're entitled to and to ensure 'compensation where appropriate will be paid'.
"These deposits belong to customers - returning them in no way presents an additional liability to the taxpayer."
He said no money had been misplaced, adding that NS&I had brought on 100 more staff to deal with the matter and that the bank's former boss Dax Harkins has resigned.
Lost investments and mistakes
According to the Telegraph most of the claims relate to bereaved families saying they didn't get money owed to them after a relative died as people have complained of being 'locked out' of relatives accounts for long periods of time.
They report cases of the bank not telling the daughter of one of their late customers about bonds her mother owned, and that NS&I had also misplaced around £2,000 of her bonds as well.
In other cases the paper saw a customer was refunded their legal costs after spending three years pursuing NS&I over them having lost track of two accounts linked to an investment portfolio.
One man told the BBC he'd had premium bonds for decades and had only just realised that for 'at least 56 years' National Savings and Investments had his date of birth wrong on their files, which means if he'd died before discovering the mistake his will wouldn't have been valid.
The man said he couldn't get into his premium bonds account for over a decade due to ID problems.
Another man told the BBC that after his wife died on 17 February he was told by NS&I it would take 'between six and nine months' for them to deal with him informing the bank she had passed away.
What are premium bonds?
Premium bonds are a specific kind of investment sold by NS&I where rather than being paid interest or a dividend on your investment you're instead entered into a monthly prize draw.
Someone pays in between £25 and £50,000 and for every pound spent you get a unique number, for reference there's about £134 billion invested in premium bonds, and a month after they've been bought they start going into the monthly prize draw.
Around 22 million people hold premium bonds.
Each month over a million winning numbers are chosen at random and paid out prizes ranging from £25 to £100,000, though two lucky winners a month will get £1 million in tax free money.
Many people who buy premium bonds will never get any prizes, let alone make money equal to or greater than the amount they put in, but a person can sell their premium bonds for their value at any time and get their initial investment back.
The idea is that since NS&I is government backed it can't collapse and it is easy to take out money that's been put in.
Lots of premium bond investments end up being forgotten about with many of the prizes going unclaimed, there are tools to check premium bond numbers and see if they've paid out, while NS&I does have a lost account tracker.
Prizes not being paid out
The estate of someone who died is entitled to the prizes for their premium bonds for the first 12 months after they died, after those 12 months the prizes are kept by NS&I.
Some of the complaints levelled at NS&I have argued that prizes on premium bonds have not been paid out properly.
According to the Telegraph in once case they saw a widower had a 'a prolonged and unhappy experience' trying to secure premium bond prizes his late wife's investments had won after NS&I failed to record that she had died.
They also report that delays in paying out money to the estates of deceased customers had caused more problems, with people's financial transactions such as house buying falling through which caused more stress for bereaved families.
Joe Harker