Tens of thousands of National Savings and Investments (NS&I) customers have said their money has been misplaced, with bereaved families also claiming they have not received money that was rightfully theirs.
The institution, which is backed by the Government, could face repaying those affected millions of pounds, The Telegraph reports.
In some cases, NS&I is said to have lost track of customers’ life savings, with many furious at how the bank has handled the situation.
NS&I is best known for its Premium Bonds – a savings product where you buy “bonds” worth £1 each. Each month, those bonds are entered into a prize draw with the chance of winning between £25 and £1m tax-free.
You can buy up to £50,000 worth of bonds in total, and each bond has an equal chance of winning. So, the more bonds you hold, the greater your chances of winning a prize.
Bonds can be easy to lose track of, especially where people die and their account details are lost, with more than 2.5million prizes worth over £100m believed to be unclaimed.
The bonds cannot expire, so you cannot technically lose your money, but unfortunately, NS&I may not always proactively track down people who have lost access or the relatives of deceased customers, so you could have money you are entitled to and not realise it.
Laura Suter, director of personal finance at AJ Bell, said: “Many of the winners this lingering prize money belongs to will be Premium Bond holders who hold low-value accounts that will have been gathering dust for decades since they were opened when they were children.
“But there will also be many people with higher balances who have also let their Premium Bonds money drift over the years.”
How to find lost Premium Bonds
If you think you have an account or have a relative who may have had one before they died, there are ways to get your savings back.
Firstly, it is worth checking your or your relatives’ paperwork for details about old accounts. For example, the purchaser would have received a letter or email confirming the purchase when they bought the bonds, which should include their holder number.
You may also have received letters about prize wins or changes to details, such as address changes. These should also contain the holder number.
If you have these details, you can try logging in and resetting your password, or you can contact NS&I and ask it to manually unlock your account.
If this fails or you do not have your holder number, NS&I also offers a free tracing service where you fill out a form and it tries to track down your lost account. You can fill out a form here: nsandi.com/help/lost-touch-with-nsandi/track-lost-investments.
To apply, you will need details of the person to whom the account belongs, including their name and any previous names, their current address and previous addresses, the approximate date the bonds were bought, and an estimate of the amount that may be in there.
Including your NS&I number or bondholder number could speed up the process, but NS&I should be able to track your account down without them.
NS&I says it will contact you if it needs any additional information or documents to verify your identity. It aims to confirm accounts within one month of receiving applications, but during busy periods it may take longer.
What to do once you regain access to your account
Once you regain access to your account, it is a good idea to make a note of your details like your holder number and password somewhere secure. For regular access, you can download the NS&I app, so you can check monthly to see if you win a prize.
It is a good idea to then check if you have won any prizes that were not paid out. You can use NS&I’s prize checker by entering your holder number, which you can find on any paperwork or in your N&SI account. The tool will show if you have won that month, as well as any unclaimed prizes.
Are Premium Bonds still worthwhile?
It could then be worth considering whether Premium Bonds are the best place for your money. The main benefit is that prizes are tax-free, but many people will hardly win anything and would be better off saving their money elsewhere in the long term.
The odds of winning prizes on Premium Bonds have fallen over the past few years, with experts saying many other savings accounts offer higher returns than those offered by NS&I.
“While many savers value the security of holding government-backed Premium Bonds through NS&I, safety does not always translate to success,” Suter said.
“NS&I’s headline prize fund rate on Premium Bonds is set to drop to 3.3 per cent from April this year, with the odds of winning also set to widen from 22,000 to 1 out to 23,000 to 1 at the same time.
“There will likely be many Premium Bond holders who believe the 3.3 per cent represents a return on cash they hold in the accounts, but in reality, it masks the fact that most people will never win anything.
“The rate is also eclipsed by many other cash saving accounts currently on the market, and comes well under what someone might expect to make on their money if they were to invest it in the stock market for the long term.”
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