National Savings and Investments (NS&I) has provided an update to Premium Bonds holders after alleged widespread failures in the handling of customers' funds.
Around 37,000 savers are believed to have been affected by errors stretching back years, with bereaved families among those claiming they were denied money rightfully owed to them.
Pensions Minister Torsten Bell updated MPs in the House of Commons on the matter, which came to light earlier this week. Mr Bell confirmed that NS&I is prioritising reuniting beneficiaries with their money "as soon as possible".
Yesterday, an NS&I 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."
NS&I has apologised to those impacted by the issue
|GETTY / NS&I
Its chief executive Dax Harkins has been dismissed after as a result of the revelations.
Mr Harkins, who earned more than £300,000 a year in pay and pension benefits, was told on Thursday morning that he was being removed from his role as chief executive during a meeting with Treasury officials.
He had led NS&I since April 2023, having risen through the organisation from its sales division.
During his statement, Mr Bell confirmed work will be done to ensure that "compensation where appropriate will be paid", with the onus being on NS&I to rectifiy the situation and not customers.
According to the minister, NS&I has analysed more than 34 million customer records, with a maximum of around £470million in deposits and around 37,500 customers believed to have been impacted.
While this number is projected to fall and represents under 0.2 per cent of the financial institution's customer base, Mr Bell declared that "it is still far too many".
Families of deceased savers have accused the institution of withholding Premium Bond winnings that should have been passed on to them.
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NS&I has unveiled two new Premium Bonds millionaires | NS&I;Reports indicate that payments were significantly delayed in numerous cases, while investments were apparently misplaced entirely.
Some customers found themselves with no option but to engage solicitors to retrieve their funds, leaving them facing unexpected legal expenses.
According to the Daily Telegraph, one woman was never informed about bonds her late mother had held, and NS&I also lost track of £2,000 in Premium Bonds belonging to the daughter herself.
Zoe Gillespie, investment manager at RBC Brewin Dolphin, warned that the full extent of the problem remains uncertain.
She said: "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." She added that the institution needed to "get on the front foot" to rebuild trust among investors and savers."
Labour pension minister Torsten Bell addressed the NS&I scandal
| PA