National Savings and Investments (NS&I), the state-owned bank responsible for safeguarding the savings of over 26 million Britons, is under intense scrutiny following revelations that it has short-changed bereaved families, lost track of investments, and delayed payouts—sometimes for years. On March 25, 2026, NS&I issued a public apology after mounting complaints from families who have endured what the bank itself described as “prolonged and unhappy experiences.” The fallout could see the institution forced to pay out hundreds of millions of pounds in compensation, a bill that may ultimately land on the taxpayer’s doorstep.
According to The Telegraph, the crisis at NS&I has been brewing for years, with families of deceased savers reporting that they have had to hire lawyers—at considerable personal cost—simply to recover money rightfully owed to them. In some cases, these legal battles have stretched on for years, with one family spending around £20,000 on probate lawyers during a three-year investigation into missing funds, and incurring an additional £2,700 in inheritance tax interest due to errors in the estate valuation caused by NS&I’s mishandling.
“Poor performance and a botched digital transformation means that NS&I are short-changing savers at a time when raising money for the Government has never been more needed,” said Andrew Griffith, the shadow business and trade secretary, in a pointed critique. “Delivering a simple set of government-backed savings products should not be this hard. The private sector does that every day.”
NS&I, which manages around £100 billion in savings and investments, is overseen by Rachel Reeves as an executive agency of the Chancellor. The bank’s chief executive, Dax Harkins, has faced growing pressure in recent months, not only over the customer service debacle but also due to a spiraling £3 billion digital modernization plan that has been sharply criticized by government watchdogs. The public accounts committee, in a report published in February 2026, labeled the project a “full-spectrum disaster.”
The modernization effort, dubbed Project Rainbow when it launched in 2020, was intended to reduce NS&I’s running costs and bring its operations into the modern era. But what began as a £1.3 billion initiative has ballooned to more than £3 billion, including a staggering £43 million spent on consultants. The committee’s report warned that taxpayers’ money was being pledged to the project without sufficient assurance it could be delivered as promised, presenting risks not only to NS&I but also to its millions of customers.
Martyn James, formerly of the private complaints mediator Resolver and a previous Financial Ombudsman Service employee, painted a bleak picture of the bank’s internal workings. “The complaints levelled at the savings bank painted a picture of sheer chaos behind the scenes,” he said. “They were not only deeply distressing for bereaved families but could also lead to significant payouts in compensation—not only for unpaid winnings, but for the financial impact of delaying or denying these payments.”
Indeed, the scale of the problem is daunting. The ombudsman’s office, which typically awards compensation in the region of a few hundred pounds, has been forced to make far higher awards in exceptional cases. In one particularly egregious instance, NS&I initially attempted to settle with a family for £12,500 plus a £500 goodwill gesture after losing track of two accounts in an investment portfolio. The ombudsman ultimately ordered the bank to cover the entirety of the family’s costs, recognizing the prolonged and unnecessary hardship they had endured.
Other stories are equally troubling. In one case, a daughter was not informed about “several very large bonds” her deceased mother had owned. NS&I also appeared to lose track of £2,000 in premium bonds belonging to the daughter herself. To add insult to injury, the bank repeatedly addressed her in her late mother’s name and, on another occasion, called her “Mr.” The ombudsman found that NS&I only admitted its errors after the daughter’s persistent efforts, eventually awarding her £400 in compensation.
Perhaps most galling for some families is the experience of being denied premium bond prizes won by deceased relatives. One widower, for example, was refused access to prizes paid into his late wife’s account because NS&I failed to mark the account as belonging to a deceased person. The bank’s bereavement team neglected to record the contents of a crucial phone call, turning what should have been a straightforward process into, as the ombudsman described, “a prolonged and unhappy experience.” NS&I was ultimately ordered to release the prizes, but only after unnecessary stress and delays.
The impact of these failures has rippled outwards. Some families, after receiving incorrect information from NS&I call handlers, have been forced to pay fines to HM Revenue and Customs. Others have missed out on home purchases due to delays in accessing funds, including one woman who had to borrow money from her brother after the bank failed to pay out her late husband’s accounts in time. Mediators have noted that NS&I’s actions have caused additional stress and have failed to meet the standard of service customers are entitled to expect.
NS&I has attributed some of the chaos to backlogs caused by the Covid-19 pandemic and to the outsourcing of certain services to overseas staff. But for many affected families, these explanations ring hollow. Filings from the mediator, as reported by The Telegraph, indicate that many complaints have been upheld, with some bereaved family members even receiving letters addressed to their deceased relatives—a painful reminder of the bank’s administrative failures.
In a statement, an NS&I spokesperson acknowledged the distress caused: “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.” The bank has also said it welcomes the public accounts committee report and its recommendations.
For many, the story is a bitter irony. NS&I was originally founded in 1861 as the Post Office Savings Bank, established to provide ordinary citizens with a safe place to save while helping to fund government spending. Over the years, it has introduced products such as Premium Bonds (launched in 1956), become an independent government department (in 1969), and rebranded as NS&I in 2002, all while maintaining 100 percent backing from the Treasury.
Yet today, as the bank faces what could be hundreds of millions in compensation claims, its reputation for security and reliability has been called sharply into question. The coming months will determine whether NS&I can restore the trust of its customers—or whether further fallout awaits Britain’s savings institution.