Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
Pensions minister Torsten Bell has confirmed that around 37,500 customers have been affected by an NS&I scandal involving up to £476m in deposits that the savings giant failed to properly trace.
Delivering a statement in Parliament, Bell revealed the Treasury was first made aware of the “operational failure” on 18 December.
A series of issues with the savings giant have been reported, including bereaved families not receiving money they were entitled to, and processes that failed to comprehensively trace some customer holdings.
What Went Wrong at NS&I?
Bell said NS&I “did not respond to warning signs as fully” as he and its customers expected, and government action was now being taken.
Since being notified, the Treasury has made sure external advisers and legal experts have been “fully engaged” in identifying the scale of the issue.
The 37,500 affected customers currently represents less than 0.2% of all NS&I customers, though Bell said this number could fall as the investigation continues.
More news:
Is Your Money Safe?
Bell stressed that all savings held with NS&I are “100% safe” and the issue is related to tracing customers, not the security of the funds themselves.
The money exists – NS&I just hasn’t been able to match it to the right people in all cases.
This is particularly devastating for bereaved families who should have received money they were entitled to but didn’t, because NS&I’s systems failed to trace the holdings properly.
What Happens Next?
NS&I must now publish a delivery plan in May on how it will work to reunite the lost funds with their owners.
Bell said compensation will be paid “where appropriate” – though what counts as “appropriate” hasn’t been specified yet.
NS&I has put in place a dedicated programme team and hired an additional 100 staff to deal with the issue.
Former HMRC boss Sir Jim Harra will replace Dax Harkins as the chief executive of NS&I on an interim basis to “provide a fresh start”, Bell added.
Do You Need to Do Anything?
Bell stressed that customers do not need to sign up to any claim management companies or hire solicitors.
NS&I will approach affected customers directly.
If you think you might be affected, wait to be contacted rather than paying for outside help.
Is NS&I Regulated?
While NS&I is not regulated by the FCA (Financial Conduct Authority), Bell said he expected it to meet the same standards.
NS&I needs to make sure that the issues will not affect customers going forward.
The fact that NS&I isn’t FCA-regulated but is backed by the Treasury means it operates in a slightly different regulatory space to normal banks – though your money is still considered 100% safe because it’s government-backed.
Who Might Be Affected?
The issues primarily seem to affect:
- Bereaved families trying to claim money from deceased relatives’ accounts
- Customers whose holdings weren’t properly traced through NS&I’s systems
- People who may have old NS&I accounts that haven’t been matched to them correctly
If you have Premium Bonds, savings certificates, or other NS&I products and haven’t had any problems accessing them, you’re almost certainly not affected.
The statement doesn’t specify exactly which NS&I products are affected, but the tracing issues suggest it could involve older accounts or products where the ownership records weren’t properly maintained.
Premium Bonds are NS&I’s most popular product, with millions of customers. If you’ve been receiving prize notifications and can access your account online, your Premium Bonds are fine.
If you found this interesting, please share!
Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
