NS&I is expected to pay out hundreds of millions of pounds to bereaved families, following an “operational failure” to trace accounts for some deceased customers.
An estimated 37,500 savers are understood to be affected by the errors, with the missing payments worth up to £476 million.
Speaking in the House of Commons today, pensions minister Torsten Bell said around three quarters of the cases relate to the period between 2008 and 2025.
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Bell said the government has asked NS&I to publish a plan in May detailing how it will reunite estates with their money, as well as how many savers are impacted.
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NS&I has said it "is extremely sorry for these errors" and will contact affected estates. The savings provider will publish further information for the beneficiaries of those estates in due course.
These deposits belong to the customers, and reuniting beneficiaries with them does not represent an additional liability to the taxpayer, Bell said.
The pensions minister said NS&I notified the Treasury on 18 December 2025 of an “operational failure to comprehensively trace accounts for some customers who had passed away”.
“The result of this failure is that not all savings were identified by NS&I and paid to the beneficiaries of their estates as they should have been,” he said.
“Specifically, processes failed to comprehensively trace some customer holdings where those were spread across multiple profiles or systems.”
NS&I said the errors occurred because the search process used when handling a bereavement claim failed to identify all NS&I products.
Bell said customer-facing supplier Sopra Steria, which delivers customer services for NS&I, said the causes of the tracing issue had been addressed and will not affect customers moving forward.
NS&I’s previous supplier, Atos, which was responsible for handling bereavement cases until 2025, “has also committed to full cooperation,” Bell said.
The pensions minister said affected customers’ money is still 100% safe.
Affected individuals will not need to contact a claims management company or solicitor to be reunited with their money.
From today, former HMRC boss Sir Jim Harra will take over as chief executive of NS&I, replacing Dax Harkins, and will undertake a review of the savings bank.
The statement comes following an investigation by The Telegraph which found cases of families of deceased NS&I customers struggling to obtain money that is rightfully theirs.
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.”
A Sopra Steria spokesperson said: "A legacy issue has been identified that affected the settlement payments to the estates of some NS&I deceased customers, which originated before our contract began. The tracing process has now been updated to ensure beneficiaries are reunited with the correct funds. We are working closely with the NS&I teams as they look to trace and return funds to all those affected.”
MoneyWeek approached the Treasury and Atos for comment.
Will affected families receive compensation?
Pensions minister Bell acknowledged that there may be tax implications for affected estates, and said the Treasury wants to “avoid bereaved families facing disproportionate disruption and administrative costs as a result of this error”.
The Treasury is exploring what support can be provided. This will be set out alongside NS&I’s delivery plan in May.
NS&I also said it will ensure customers' estates are "appropriately compensated", with more information due in May.
Public Accounts Committee’s damning report on NS&I
It comes just weeks after the Public Accounts Committee criticised NS&I over rising costs and delays in modernising its systems.
The damning report from the committee said the savings bank “did not have the skills to deliver” the Business Transformation Programme which it launched in 2020.
The report noted that the programme was rated “red” in 2022/23 and 2023/24, meaning successful delivery of the project was “unachievable”.
The total cost of the programme, including running costs, were estimated to have hit £3 billion in 2024.
The report went on to explain how NS&I “has not demonstrated to us that it understands and accepted what went wrong” and that it “remains overconfident about its ability to meet its current timetable”.
The committee also said customers could be at risk if the programme is unsuccessful.
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