The Parliamentary Secretary to the Treasury (Torsten Bell)
I would like to make a statement regarding National Savings & Investments. On 18 December 2025, NS&I notified the Treasury of an operational failure to comprehensively trace accounts for some customers who had passed away. The result of that failure is that not all savings were identified by NS&I and paid to the beneficiaries of their estates as they should have been. Specifically, processes failed to comprehensively trace some customer holdings where they were spread across multiple profiles or systems.
Hon. Members will be aware of historical challenges in financial services in this regard. For example, the Financial Conduct Authority took enforcement action in 2018 against Santander relating to the tracing of accounts following notification that a customer had passed on. That received significant attention at the time. However, what is now clear is that NS&I and its suppliers did not respond to those warning signs as fully as I and, more importantly, their customers, would expect, and nor did the last Government act.
Bereaved families, whose loved ones held accounts with NS&I, will rightly be anxious about this news, so let me turn to the action that we have taken and the further steps that we are putting in place today. Since being notified, the Treasury has ensured that external advisers, including EY and legal experts, have been engaged to identify the scale of the errors. Through this work, NS&I has reviewed over 34 million customer records. That work is ongoing, but it points to up to a maximum of around 37,500 customers, with up to £476 million in deposits, being affected. Three quarters of cases relate to the period between 2008 and 2025. The number is likely to fall in future, but although it represents less than 0.2% of NS&I’s customers, that is still far too many.
NS&I is not regulated by the FCA, but the Government expect it to live up to the same standards as regulated deposit-taking banks. It is therefore right that NS&I is apologising today. The Government’s priorities now are threefold. First—and immediately, to ensure that the problem is no longer taking place—NS&I has received written assurances from its customer-facing supplier Sopra Steria that the causes of the tracing issue have been addressed and will not affect customers going forward. Its previous supplier, Atos, has also committed to full co-operation, given that it was responsible for handling bereavement cases until 2025.
Our second priority is to ensure that we reunite beneficiaries of those customers who have passed away with any funds that NS&I holds. Those deposits belong to customers. Returning them in no way represents an additional liability to the taxpayer, and for the avoidance of doubt, let me spell out that those savings are 100% safe. The issue is about tracing and not the security of any funds, but it is important, none the less. NS&I has put in place a dedicated programme team and hired an additional 100 staff. I have asked it to publish a delivery plan in May detailing how they will take forward the work to reunite funds with their owners. This will cover: the number of cases affected; how NS&I will proactively contact representatives of estates to ensure they receive the funds that they are due, including interest on savings; and the compensation that, where appropriate, will be paid.
There is no need for individuals to waste money on a claims management company or solicitor. I reassure people that the onus is not on them but on NS&I to act—to contact estate representatives and to reconnect beneficiaries with the money they are due. Further information is available on the NS&I website and its contact centre is open seven days a week. I will also ensure that MPs have a dedicated means of contacting NS&I to raise any constituency cases directly.
Dealing with bereavement is always challenging, and I am sure that we all recognise that finding out, as party of that, that such errors have been made could be distressing. We are committed to ensuring that NS&I supports those who have experienced a loss by making the process for reuniting beneficiaries with their money as easy as possible. We also recognise that there may be tax implications for affected estates and want to avoid bereaved families facing disproportionate disruption and administrative costs as a result of the error. We are exploring what support we can provide and will set this out alongside NS&I’s delivery plan in May.
Current NS&I customers can access their accounts as normal. Any wishing to trace old accounts can use the tracing services direct through NS&I or the My Lost Account website. Because in the past some searches have focused too narrowly on searching for specific accounts, I have also instructed NS&I to make it simpler for people to search for all the accounts or products that they might hold.
Our third priority is institutional. NS&I plays an important role, helping the public to save and providing a material contribution towards Government financing. The organisation must continue to play that role while addressing the tracing issues that I have laid out today. It must also complete what has been a challenging business transformation programme. The programme was put in place back in 2020, but with little progress made in the previous Parliament, as the recent Public Accounts Committee report has set out. This Government have appointed David Goldstone, former chief operating officer at the Ministry of Defence, to support NS&I to bring the programme back on track.
With all this in mind, I also want to make sure that NS&I has the very best leadership in place. Effective from today, I have appointed Sir Jim Harra—former first permanent secretary at His Majesty’s Revenue and Customs—to take over as the chief executive of NS&I on an interim basis, to provide a fresh start for NS&I’s next phase of development. I also recognise the 22 years of public service of his predecessor Dax Harkins at NS&I.
As well as providing leadership to the organisation, Sir Jim will undertake a review over the next three months to spell out in detail the background to the tracing problem and to set out what lessons must be learned by NS&I. I have discussed this with Sir Jim and am confident that his extensive experience will help guide NS&I in the months ahead. I will ensure that Sir Jim’s review is shared with the Chairs of the Treasury and Public Accounts Committees upon completion.
NS&I holds over £240 billion of savings belonging to 24 million customers. It is an organisation that is valued by those saving with it and by this Government. I repeat NS&I’s apology to its customers and reiterate that every penny of their savings is safe, and—as always—they are 100% guaranteed by the Treasury. I commend this statement to the House.
Mark Garnier (Wyre Forest) (Con)
I thank the Minister for early sight of his statement. This scandal affects tens of thousands of people, and it could end up costing taxpayers many millions of pounds. NS&I is supposed to be as safe a place as anywhere for people to put their savings—a place where savers can trust that their money will be looked after. As we have heard, 24 million people do so. It is also a savings scheme that the Government can use as a benefit to taxpayers, borrowing to provide funds for the running of the country. It needs to be demonstrably secure.
In reality, bereaved families have been short-changed, with NS&I losing track of investments, delaying transfers and withholding premium bond payments. Customers have faced a complete breakdown in communication at the most difficult time, adding stress and worry. In the breaking newspaper reporting today, we have heard how people have had to chase up their own cases, only to be told that they would have to wait a further six to nine months for a resolution. Some families have also had to call in lawyers to obtain money that is rightfully theirs, and there are examples of bereaved family members receiving letters incorrectly addressed to their dead relatives. NS&I has in the past tried to blame some of these failures on covid and the outsourcing of staff, but whatever its excuse, this is unacceptable and a complete failure of management.
NS&I is letting down its customers, and complaints have more than doubled in just over three years. At the same time, the digital transformation of NS&I that was meant to cost £1.3 billion has now ballooned to £3 billion. Is it any wonder that the Public Accounts Committee was damning about the digitalisation plan, calling it a “full-spectrum disaster” and concluding that NS&I is “over-confident” and
“has no workable plan, and no idea of eventual cost.”
If the Public Accounts Committee could see it, why have this Government been sitting on their hands? Poor performance and a botched digital transformation mean that NS&I is short-changing savers at a time when raising money for the Government has never been needed more.
NS&I is an arm’s length body overseen by the Treasury. Specifically, it is an Executive agency of the Chancellor, so it is concerning that the Minister has today admitted that NS&I notified the Treasury of these operational failings on 18 December last year. It has apparently taken a breaking news story in The Daily Telegraph for the Government to make a statement today. Can the Minister please explain why it has taken him over three months to come forward with this statement? He also says that the previous Government failed to act. That implies that there was something to act on. Can he set out what actions he has taken between coming to power on 4 July 2024 and 18 December 2025?
I have some further questions for the Minister. What provision has been made for compensation and who will pay for it? Where bonuses have been paid to senior staff over the period of poor performance, will they be recovered? On that note, we have seen reports that the chief executive will be resigning as a result of this issue and the botched digital transformation process. Can the Minister confirm whether he has resigned, or has he been sacked? Can he confirm whether the chief executive received bonuses over this period of poor performance? Finally, what confidence do the Minister and the Government have that this is the true depth of the problem affecting bereaved families? What work is he doing to identify whether this might be the tip of an iceberg? I am not trying to imply that it is the tip of an iceberg, but I ask the question to ensure that this is the limit of the problem.
People have been let down. While NS&I has apologised for the mistakes, it will be of little comfort to those thousands of people who have lost out. The Government need to act swiftly and the families need to be compensated. The Opposition will work collaboratively with the Government to ensure a swift resolution.
Torsten Bell
I welcome the tone of the shadow Minister’s remarks. I obviously absolutely agree with him that customers deserve better and they deserve reassurance. I have tried to provide that today by setting out what we are doing, and giving everybody reassurance that their savings are 100% safe and are guaranteed by the Government.
The hon. Member asks why we have come to the House today. This has been the intention for some time. As he says, we were notified in December. During that period, we have reviewed the over 34 million cases of customer records, as I mentioned, and have put in place the process to ensure that we have fixed this problem as we go forward, so that we can provide the reassurance for customers that I know we both want. I have also put in place the change of leadership that I have set out today, about which the hon. Member asked. I can confirm that the former chief executive of NS&I has resigned today and that he did not receive a bonus last year.
The hon. Member asked about the cost to taxpayers. There has been some deeply misleading reporting over the course of the last 24 hours, so I want to be absolutely clear: the money we are talking about returning to estates belongs to those estates—it is their money. The returning of people’s money to them is not a liability to other taxpayers; it is the right thing to do, and that is what is going to take place.
The hon. Member asks whether it would have been reasonable to have expected the previous Government to act. I am sure that he would rightly note that NS&I is operationally independent; I think the challenge comes given that it became clear in around 2018 that there were significant problems in this area—I mentioned the Santander case in particular—and there was widespread coverage at that time; within NS&I, people realised that this could pose problems for them.
The hon. Member has taken an excellent tone today. I was less impressed to read the comments of the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), in the Telegraph, in which he talked about a “staggering failure of oversight”—he was the Treasury Minister in 2018 when the Santander case came forward! As often, the hon. Member for Wyre Forest (Mark Garnier) has shown better judgment than his superiors. Then again, the right hon. Member for Newark (Robert Jenrick) has also talked about
“incompetence on a staggering scale”,
which is an irony given that he, too, was a Minister in the Government carrying out the incompetence to which he refers.
I broadly welcome the way in which the hon. Member for Wyre Forest has conducted himself today. It is absolutely right that we provide the reassurance to taxpayers and, most importantly, to savers with NS&I; I hope that I have done so today.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
I thank the Minister for his statement. I am glad to see that he is stepping in, and I am pleased to hear that National Savings & Investments will focus on reuniting bereaved families with their money, which it holds after things went badly wrong. How will he and the Government raise awareness with savers of the fact that they do not need to use claims management companies and that they can rely on NS&I putting things right?
Torsten Bell
As always, I thank my hon. Friend for his important question. He is absolutely right—the priority for us is to ensure that people are reunited with their money and that they do not incur costs in trying to get it back. That is why I have been so clear with NS&I over the past few months that it makes sure that it understands the problem it is dealing with and that it needs to set out a delivery plan as soon as May for how it will reunite people with their money. That will involve contacting representatives of estates in the first instance, and that is what people need to rely on. As I said, I want to be clear with the public today that the onus is not on them; the onus is on NS&I to contact the people whose funds deserve to be reunited with them, and that is what we will all be focused on.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Bobby Dean (Carshalton and Wallington) (LD)
I thank the Minister for advance sight of his statement and for the action he has outlined that the Government are already undertaking. He will know that customers often choose National Savings & Investments because it is Government-backed, and because that provides them with extra reassurance that their savings will be safe. The news that the money of tens of thousands of people was essentially lost for a period of time will be a hammer blow to trust in that institution, and the fact that these cases involve bereaved families makes it particularly damaging.
To restore trust in the institution, it will be vital that justice is served comprehensively and swiftly. Will the Minister confirm the estimated timeline for identifying and contacting every family affected? Have the Government committed not only to reimbursing or returning the money that the families are due, but compensating them fully to reflect the distress that has been caused? He has already mentioned interest; will he confirm that all that interest will be returned? Will legal costs also be reimbursed? Some of the bereaved families resorted to legal action to get what they believed they were owed, and I am sure that they will feel that they are entitled to be reimbursed on that as well. Will the Government now carry out a full independent investigation to fully learn the lessons of what happened and ensure that there will be much stronger oversight of the system going forward?
Torsten Bell
I thank the hon. Member for his questions —let me try to do justice to them. He is completely right that one of the reasons customers choose NS&I is that they trust the institution, but they also know that it has that 100% Government backing. It is important that we are all clear with everybody that that remains in place, that no funds have been misplaced and that everybody will be entitled to every penny of their savings.
On rebuilding that trust, that is why I have put new leadership in place. Sir Jim’s review will lay out those lessons. He is an interim chief executive, and we will be recruiting for a permanent replacement, so he is in a position to give us the full truth about what he sees. He is an experienced public servant and public sector leader, so we should look to his review. As I say, I have asked him to report in three months’ time. I will ensure that the appropriate Select Committee Chairs have that review. It will set out the lessons that we need to learn.
The hon. Member rightly asks about compensation. As I set out in my statement, we will ensure that the appropriate compensation is paid along the lines of how the FCA encourages best practice. That will include compensatory interest where funds have been withheld from estates for longer than they should have been, and that will be done automatically. People who have more complicated cases will as always be able to go direct to NS&I to have them considered on a case-by-case basis.
Callum Anderson (Buckingham and Bletchley) (Lab)
I thank the Minister for providing an update. Many families across the country will be incredibly anxious about this news. Can he tell us a bit more about how he will hold the new executive and non-executive teams to account, to ensure that lessons are learned and there are no more systems failures in the future? Beyond the two Select Committees he mentioned, how will he keep the House up to date?
Torsten Bell
My hon. Friend is absolutely right to talk about the anxiety that I am sure some people will be feeling, but it is more than that: we are talking not just about any old savings, but about bereavement cases. We do not want issues to be dragged back up in historical cases—as I said, 75% of them took place between 2008 and 2025, but there are also older cases, too. I appreciate that that will be difficult for many people, and it is our job to ensure that NS&I provides as much support as it can for those people.
On the new leadership, I have been absolutely clear that we will see a delivery plan in May setting out the full timeline for rectifying the errors. As I said, on a longer timeline—although only three months, so there is not long to wait—I am asking Sir Jim to give us his wider review of the lessons from this and for the future of the governance of NS&I.
John Glen (Salisbury) (Con)
I welcome the actions that the Government are taking to restore trust in NS&I, and to take the appropriate compensation measures. I was in the Treasury for a while, and I had conversations with the previous chief executive—the one prior to 2023. Like the Minister, I took advice from my officials on what assurances I could have from NS&I on the delivery of programmes to transform the IT infrastructure, and I was given those assurances. I welcome the appointment of Jim Harra, who I think is an excellent public servant and is very well placed to understand the nuances of this issue. Will the Minister review the mechanisms by which his officials keep on top of what is happening at NS&I, so that he can be absolutely sure that when things go awry, they are brought to his attention and he can make the necessary interventions? I do not think that that happens currently.
Torsten Bell
The right hon. Gentleman was a Treasury Minister for some duration, so he brings experience on these issues. He is right to say that, when it comes to an Executive agency such as this one, Ministers’ job is to receive assurance and provide strategic direction, so let me just say a bit about how we have been thinking about that. In terms of assurance, I have asked in the shorter term for written attestation not just from NS&I but from the providers that do most of the customer-facing work in that organisation. I have asked for assurances from the current provider that we will not see any such mistakes going forward, and, as I said, I have asked Atos—the previous provider—to provide attestation that it will co-operate fully, given that it was the provider throughout the entirety of the last Government, until 2025. I hope that that gives the right hon. Gentleman some assurance about how we are seeking assurances.
More broadly—this is a slightly separate issue, but I think it is relevant to the question of the organisation’s leadership—the right hon. Gentleman is right to raise the challenges in the transformation programme, which started in 2020 but has gone far too slowly and over budget, as the Public Accounts Committee has made abundantly clear. We have already put David Goldstone, the former chief operating officer at the Ministry of Defence, in to support that programme of work—we need to ensure that it is back on track. We will update the Select Committee—and the right hon. Gentleman, if he would like—about that process of work.
Ms Julie Minns (Carlisle) (Lab)
Sadly, I have administered the wills of two relatives in the past year, both of whom held NS&I accounts, so I know acutely how difficult and emotional that time can be. I have two questions for the Minister in that regard. Can he assure my Carlisle constituents that any moneys owed to them and their families will definitely be paid, and can he give an assurance that NS&I will handle these cases very sensitively, taking into account the distress that many families will be experiencing?
Torsten Bell
My hon. Friend is completely right. I am sure that she speaks for many people today. The experience of administering estates is challenging for us all at the best of times, and it is of deep regret to me—and, I am sure, to everyone at NS&I—that we are putting anybody through complications. I can give her the reassurance that everybody will be paid all moneys due and held by NS&I. We will make every endeavour to reconnect people to their funds. That will include, as I say, directly contacting the representatives of estates, who will have contacted NS&I in the first place to notify it of a death. Were that not to be successful, we would then put in place a chain of contact below it. The details will be set out in the plan in May, but I can give a reassurance that that is already being worked through. We will use the time between now and May to continue to examine the data that NS&I holds—I have said that we are reviewing over 34 million cases—to ensure that we have the absolute best contacts and are able to go as soon as the delivery report plan has been set out.
My hon. Friend rightly raised the question of distress. I can absolutely give her the reassurance that everybody involved understands how they should be handling matters. As I said, for the Treasury’s part, that includes recognising that there will be worries about the implications for some estates of taxes due. I will set out how we intend to address that in May.
Sir Julian Lewis (New Forest East) (Con)
I thank the Minister for making this statement today, and welcome the appointment of Sir Jim Harra, who did indeed have an excellent record at the head of HMRC, as interim chief executive.
I think we ought also to have a word of praise for the consumer affairs team at The Daily Telegraph, who have drawn welcome attention to unwelcome statistics, such as £116 million in unclaimed premium bond prizes, £3 billion spent on digitisation and £43 million spent on consultants for doing we know not what. Given that the Financial Ombudsman Service can award only token sums by way of compensation for maladministration, can the Minister assure NS&I savers that, when it comes to the question of compensation that must be paid to them by NS&I, there will be some dedicated method whereby those who are already severely out of pocket can have speedy resolution of their claims and recompense?
Torsten Bell
Let me try to take the right hon. Member’s questions in turn. I would think of compensation as two buckets. There will be automatic compensation relating to the withholding of funds. The FCA provides guidance on how that should be administered, and we will ensure that is put in place in full. More complicated cases—he has given examples in which the deprivation of funds has had implications—will be considered on a case-by-case basis, rather than by using the FCA formula that I have mentioned.
I am keen to praise journalists where we can, but I am afraid that, in the case of The Daily Telegraph in recent weeks, praise needs to be caveated. It is important to raise cases brought up by members of the public, but some of the reporting I have seen in the past 48 hours has been incredibly inaccurate. I will give the right hon. Gentleman two examples. The Daily Telegraph has published a piece claiming that 160,000 cases relating to NS&I have been brought to the Financial Ombudsman Service, when in truth that number is in the hundreds. That was printed on the front page of the newspaper without basic fact-checking taking place. Today, the paper has talked about taxpayers’ money being used to reunite people with their funds. That is entirely inaccurate for the reasons that I have set out. I worry that that will have worried some MPs and members of the public. It is important that we raise questions of customer service, in which NS&I has fallen short, as I have said, but we should not be blind to what has been inaccurate journalism in the past 48 hours.
Phil Brickell (Bolton West) (Lab)
I have very fond memories of the National Savings & Investment savings account that I held as a child—I regularly paid money into it at Little Lever post office. I understand how important it is for the Government to right historical failings at NS&I, and to reassure my constituents. I commend the Minister and the Treasury for the decisive action that they have taken, including the appointment of a new NS&I chief executive who is well respected across this House. What more can the Minister say to assure savers in Bolton West that NS&I will get to grips with the issues that he has mentioned today? In the light of his comments about false reporting in The Daily Telegraph, and given the extreme sensitivity around bereavement and funds, what more are his Department and officials doing to dispel the false information that has been put out by newspapers?
Torsten Bell
I am sure that many Members across the House, and many people across the country, share my hon. Friend’s experience of early engagement with NS&I. The brand has very high awareness and support for exactly the reasons he gives. On his question about an assurance that there will be change, I hope that I have set that out. The most important thing is putting in place new leadership and ensuring that we have spent the time with external advisers involved in recent months to understand the problem in detail and to set the path to putting it right. He will have heard what I have said about some of the media reporting. I hope that my statement has laid out the facts on the implications for taxpayers and the nature of the problem we are facing.
Laurence Turner (Birmingham Northfield) (Lab)
I welcome the Minister’s statement and the way in which he has addressed the House. I want to pick up on the important question asked by my hon. Friend the Member for Carlisle (Ms Minns). The administration of a deceased loved one’s affairs is a lengthy and difficult process at the best of times. It will come as a tremendous shock to many of our constituents to learn that matters that they thought were settled are in fact not so. We can also all think of examples of public agencies that have promised tact and sensitivity, but have not always followed through in practice. Will the Minister look at individual cases that we might raise with him as constituency Members, and will he meet with groups of Members who have constituents affected by the issue?
Torsten Bell
My hon. Friend is absolutely right that administering the affairs of deceased family members or friends is always challenging, both emotionally and administratively. That is why it is so important that we get this right, now that we have set out the scale of the problem. On his specific question, I encourage him to support constituents. That is why I have said that I will require NS&I to put in place a direct method of communication for MPs who wish to raise constituency cases, and obviously I will be happy to meet him or anybody else who has constituents affected.
Madam Deputy Speaker (Caroline Nokes)
I thank the Minister for his statement and for his very thorough responses.