NS&I could be forced to pay out hundreds of millions in compensation after 'short-changing savers'

National Savings and Investments (NS&I) could be forced to pay hundreds of millions of pounds in compensation after being accused of "short-changing" bereaved families. The families of deceased NS&I savers have accused the bank of losing track of investments, delaying payouts, and withholding premium bond prizes - incurring thousands in additional costs in lawyer expenses. The state-owned bank is among Britain's largest financial institutions, looking after around £100billion for more than 26 million people. Some have been made to pay fines to HMRC after receiving incorrect information from NS&I call handlers. TRENDING Stories Videos Your Say Others claim to have lost thousands of pounds in interest because of delays in money being released, or have even missed out on buying homes. Complaints against the nation's savings bank have more than doubled in just over three years, rising from 73,000 in the second half of 2021 to almost 160,000 in the first half of last year, according to data from the Financial Ombudsman Service. Documents seen by The Telegraph reveal families received letters addressed to deceased relatives, adding to their stress and grief. Dax Harkins, NS&I's chief executive, has now been blasted as a result. Andrew Griffith, the Shadow Business Secretary, laid into NS&I's "poor performance and a botched digital transformation". "Delivering a simple set of government-backed savings products should not be this hard. The private sector does that every day," he added. Official rulings from the ombudsman revealed the bank blamed some errors on the Covid pandemic, as well as outsourcing to overseas staff. The levels of compensation awarded are normally limited to a few hundred pounds, but in exceptional cases can be far higher, and are ultimately funded by the taxpayer. One failure from the bank led to a widower being denied access to his late wife's premium bonds, turning what should have been a "straightforward process" into a "prolonged and unhappy experience". NS&I keeps premium bond prize wins paid to accounts whose holder has been dead for more than a year. He informed the service of his wife's death in time for the prizes to count, but the bank failed to record the content of the call. The bank was ordered to release the prizes by the ombudsman. LATEST SAVINGS NEWS: Huge banking change coming next month as 453,230 accounts shut in just one year Savings warning as thousands face unexpected delays when accessing their money - 'unacceptable!' Premium Bonds alert: Savers 'will never win or see a return on their money' from NS&I In another case, NS&I was forced to refund a woman's family for tax interest and legal costs it had incurred after the savings bank lost track of two accounts like to an investment portfolio. The family was forced to pay probate lawyers around £20,000 extra after a three-year investigation to the bottom of the missing funds. The error also meant they had incorrectly valued the estate for tax purposes, costing the family £2,700 in additional inheritance tax. NS&I was forced to cover the entirety of the family's costs after it previously attempted to pay just £12,500 in compensation, alongside a £500 gesture of goodwill. The daughter of another deceased saver was not told her mother owned "several very large bonds", and appeared to lose track of another £2,000 in premium bonds the daughter herself owned. She was also mistakenly referred to by her mother's name, and in another instance called a "Mr". The ombudsman said NS&I only admitted mistakes after the daughter persisted, and awarded her £400 in compensation. Last month, the Public Accounts Committee said a £3billion plan to digitise the bank in a plan originally called Project Rainbow was a "full-spectrum disaster". First announced in 2020, it had meant to be completed in 2024. But costs have ballooned from £1.3billion, with NS&I accused of spending £43million on consultants alone. Premium Bonds were introduced in 1956, then became an independent Government department in 1969, and rebranded as NS&I in 2002. An NS&I spokesman said: "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." Our Standards: The GB News Editorial Charter

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