𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Tens of thousands of NS&I (National Savings and Investments) are expected receive compensation running into hundreds of millions of pounds over a major missing savings blunder.

NS&I, a state-owned bank best known for Premium Bonds, has been a source of trust for savings since 1861. Premium Bonds prizes and odds of winning are set to be cut again from next month.

Concerns have been raised about admin errors which have meant that some bereaved families have not received funds that were due to them. The claims are also said to date back many years.

NS&I has apologised to bereaved families following the claims.

A spokesperson 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.”

Pensions minister Torsten Bell is expected to make a statement over the issue to MPs in House of Commons on Thursday.

How large the payouts could be is unclear – but the Treasury says it is working with NS&I to come up with some numbers.

Some 37,000 customers are said to be affected and the amount of money owed could be as much as £400m, The Daily Telegraph, which first published the story, reported.

Zoe Gillespie, investment manager at RBC Brewin Dolphin, told the BBC Today programme: “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.”

So far, these look like administrative failures rather than anything more sinister, but public perceptions of previously trusted institutions have been dented, not least by Post Office IT scandal.

NS&I was originally set up as the Post Office Savings Bank.

It has 24m savers of which 22m are Premium Bond holders who hope to win money from monthly prize draws.

In many cases, NS&I seems to have simply lost tracks of customer accounts.

Since it is state-owned, the Treasury will be on the hook for the compensation. NS&I chief executive Dax Harkins faces some difficult conversations with chancellor Rachel Reeves, whose department has oversight of the savings bank.

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.”