NS&I set to pay millions in compensation to customers

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Dearbail Jordan,Business reporterand

Claire Keenan

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PA Media

National Savings and Investments bank has been accused of a series of errors

National Savings and Investments (NS&I) is expected to pay hundreds of millions of pounds in compensation to customers who claim there have been failures in managing their money.

The government-backed bank has been accused of a series of errors dating back years, with some bereaved families saying they did not receive money that was rightfully theirs, according to reports in the Daily Telegraph.

Pensions Minister Torsten Bell is expected to address the issue, said to potentially affect about 37,000 customers, in a statement to MPs in the House of Commons on Thursday.

NS&I has apologised to anyone suffering a bereavement who had not received the customer service they should expect.

A spokesperson for NS&I said on Wednesday: “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.”

There are complaints NS&I withheld Premium Bond prizes from the families of deceased savers, with some reporting the bank delayed payments and lost track of investments.

Others were reportedly forced to turn to lawyers to help recover the money, incurring additional costs.

The BBC has approached NS&I for comment about the expected payouts.

Treasury officials are understood to be working with NS&I to determine the exact amount to be given to customers.

But the scale of the problem remained unclear, said Zoe Gillespie, investment manager at RBC Brewin Dolphin.

“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,” she told the BBC’s Today programme.

NS&I needed to “get on the front foot” to restore investor and savers’ confidence, she added.

The pensions minister is likely to face questions as to whether taxpayers could end up responsible for any compensation bill when he updates the Commons.

NS&I - originally set up in 1861 as the Post Office Savings Bank - serves more than 24 million people with a range of savings and investment offers. Customers include more than 22 million Premium Bonds holders, who stand to win money from a monthly prize draw.

In one case case cited by the Telegraph, NS&I reportedly failed to tell the daughter of a deceased saver about bonds her mother had owned and appeared to lose track of £2,000 in Premium Bonds the woman herself held.

In another case, NS&I is said to have refunded a woman’s family for tax interest and legal costs after it lost track of two accounts linked to an investment portfolio.

£100m of premium bond prizes remain unclaimed

HM Treasury

Banking