NS&I boss replaced as savers left waiting for millions of pounds

The boss of government-backed bank National Savings and Investments (NS&I) has been replaced following a scandal over lost funds.

Some 37,500 people have been affected, with bereaved families facing delays accessing their relatives' premium bonds with a total value of up to £476m.

Pensions Minister Torsten Bell said those affected would receive compensation "where appropriate". He added that NS&I chief executive Dax Harkins had resigned and been replaced by former HMRC boss Sir Jim Harra.

Bell told MPs that NS&I had notified the Treasury in December of "operational failures" in tracing funds. NS&I said the issue causing the errors had been resolved and it apologised for the mistakes.

Originally set up in 1861 as the Post Office Savings Bank, NS&I serves more than 24 million people with a range of savings and investment offers. Customers include more than 22 million premium bonds holders, who stand to win money from a monthly prize draw.

The attraction of its products is their security, with the safety of savings guaranteed by the government.

But some bereaved families have spent years trying to access their late loved ones' money, telling the BBC of multiple forms, numerous phone calls and great distress.

Some were reportedly forced to turn to lawyers to help recover the money, incurring additional costs.

'Most awful, awful experience'

Tracy McGuire-Brown from Newbury in Berkshire told BBC Your Voice it took six years to claim £2,000 in premium bonds her late father had left in his will.

The 61-year-old former care home manager says she "cannot describe how upsetting and frustrating" it was to deal with NS&I, and that she had to send in her father's will and other original documents at her own expense.

"It was the most awful, awful experience," she says.

After she complained, NS&I sent her £150 for the expense of sending several original documents by secure post.

Pensions Minister Bell said that after reviewing over 34 million customer cases, the government had identified around 37,500 customers affected.

"The money we are talking about returning to estates belongs to those estates. It is their money and so the returning of people's money to them is not a liability to other taxpayers," he said.

He stressed that the onus would be on NS&I to act, and not on customers, and that further information would be available on the bank's website.

Bell said he had asked NS&I to publish a plan in May detailing how it would take forward this work.

However, he also said: "Compensation, where appropriate, will be paid."

He added: "We are exploring what support we can provide and will set this out alongside NS&I's delivery plan in May."

Bell told the Commons he wanted to make it clear that NS&I funds retained full government backing.

"No funds have been misplaced and everybody will be entitled to every penny of their savings," he said.

"In terms of rebuilding that trust, that is why I put new leadership in place."

Keep your will up-to-date

NS&I said in a statement that errors occurred because the search process used when handling a bereavement claim failed to identify all of its products.

"The issue has been resolved for current and new bereavement claims and robust measures have been introduced to ensure this does not happen again.

"NS&I apologises and is extremely sorry for these errors. It is working hard to ensure everybody affected is paid what is owed to them."

Anna Bowes, personal savings expert at The Private Office, said while this sort of situation shouldn't happen, it showed why it was important to have all of your affairs in place.

"Make sure you have an up-to-date will and if you can, have a chat with your chosen executor so that they know where all of your finances can be located, so that it is as simple as possible for them to approach everyone they need to.

"However, it is the responsibility of the savings/investment/pensions provider to make sure they have trained bereavement specialists and IT systems in place to make sure that this process is as straightforward as possible," she added.

Additional reporting by James Kelly