- Reports suggest NS&I compensation package could reach £400m
National Savings and Investments (NS&I) is poised to pay hundreds of millions of pounds in compensation to customers who allege the state-backed bank failed to manage their money properly.
Among other blunders, the bank has been accused of short-changing bereaved families by losing track of investments, delaying payouts and withholding premium bond prizes.
On Thursday, pensions minister Torston Bell is expected to address the matter in a statement to MPs in the House of Commons.
Approximately 37,000 NS&I customers are understood to be affected by the bank’s multiple blunders.
Some customers, including the bereaved, were reportedly forced to turn to lawyers to help recover the money they were owed by NS&I, incurring additional costs.
In one 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.
Update: On Thursday, pensions minister Torston Bell is expected to address the NS&I matter in a statement to MPs in the House of Commons
The Treasury is understood to be working with NS&I to establish the precise sum of compensation to be given to affected customers.
Concerns are mounting that taxpayers could end up footing the compensation bill. According to the Telegraph, the bill could reach £400million.
This week, NS&I apologised to customers suffering a bereavement who had not received the customer service they expected.
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.’
Zoe Gillespie, investment manager at RBC Brewin Dolphin, told the BBC’s Today programme: ‘The NS&I is currently working through a £3billion modernisation programme which is years behind, so there appears to be some issues with potential tech or customer service problems.’
NS&I needed to ‘get on the front foot’ to restore investor and savers’ confidence, Gillespie added.
Shadow Chancellor Sir Mel Stride said: ‘Hard-working taxpayers could be asked to pick up the bill for what appears to be a staggering failure of oversight.
‘The idea that £400million of taxpayers’ cash may now be needed to put right years of mismanagement is deeply alarming.’
He added: ‘Serious questions must be answered, and fast, about who knew what and when.’
In February, NS&I was accused by a committee of MPs of being ‘bullishly confident’ over a £3billion digital transformation project.
The Public Accounts Committee said it was not confident the scheme, designed to modernise NS&I’s operations and measurably reduce its running costs, could be successfully delivered.
The state-backed bank was found by the MPs to have no workable plan and claimed the bank lacked the skills to deliver it.
NS&I offers a range of savings and investments to more than 24million customers, including over 22million Premium Bonds holders.
Every month, more than a million Premium Bonds winners are chosen at random and two bond holders pocket £1million each. Other prizes range from £25 to £100,000.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Freetrade
Freetrade
Investing Isa now free on basic plan
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
