NS&I alert: Premium Bond holders given compensation update amid major savings scandal

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."

Families of deceased savers have accused the institution of withholding Premium Bond winnings that should have been passed on to them.

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.

LATEST DEVELOPMENTS

• Rachel Reeves raids millions of cash ISA savers for £95million in tax, Treasury admits
• NS&I could be forced to pay out hundreds of millions in compensation after 'short-changing savers'
• Huge banking change coming next month as 453,230 accounts shut in just one year

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."

THIS IS A BREAKING NEWS STORY...MORE TO FOLLOW