In an emergency announcement to parliament, Treasury minister Torsten Bell told MPs the senior management of the National Savings & Investments bank needs to be overhauled and appointed Sir Jim Harra, former CEO of HMRC to the top job on an interim basis as chief executive of the government-backed NS&I. Harra replaces the former chief executive and accounting officer Dax Harkins, who has been sacked.

Bell said NS&I needs the ‘best leadership’ as he called on retired HMRC boss Harra to oversee ‘fresh start’ for troubled bank.

This follows the admission by NS&I that it had ‘misplaced’ £470m in customer savings, from accounts and premium bonds, resulting in thousands of families left unable to claim the money of deceased relatives held in the bank.

This raises serious questions about the quality of financial reporting at the organisation, with failures to account for savings correctly, with a nearly half a billion potential shortfall which likely will have to be bailed out by the taxpayer.

The latest annual report showed that NS&I paid the equivalent of a notional external audit fee for the audits of the 2024–25 accounts totalling is £578,500 (2023–24: £559,000) performed by the National Audit Office (NAO). In the annual report, Harkins stated: ‘As far as I am aware, there is no relevant audit information of which the auditors are unaware.’

The £470m savings disaster means the beneficiaries of the accounts of deceased premium bond holders and savers with money in the NS&I experienced very long delays in accessing money which belonged to their deceased relatives, a situation which appears to have been going on for years.

Treasury minister Torsten Bell said: ‘I want to make sure NS&I has the best leadership in place. Effective from today I have appointed Sir Jim Harra, former HMRC first permanent secretary to take over as the chief executive of NS&I on an interim basis to provide a fresh start for NS&I next phase of development.

‘As well as providing leadership to the organisation Sir Jim will undertake a review over the next three months to spell out in detail the background for this tracing problem and to set out what lessons NS&I must learn going forwards.

‘I have discussed this with Sir Jim, and I am confident his extensive experience will help guide NS&I in the months ahead. I will ensure Sir Jim’s review will be shared with chairs of the Treasury and Public Accounts Committees on completion.’

Harra spent nearly 41 years at HMRC, holding the top role as first permanent secretary and chief executive for five years from 2019 before he retired in April 2025. Since his retirement he has kept a fairly low profile and had even removed his LinkedIn profile when he first left the tax authority nearly a year ago.

After leaving HMRC, Harra was appointed vice chair of the board of trustees and chair of governance for the Royal National Institute of Blind People (RNIB), apart from this Harra has relatively disappeared from public life.

The former head of HMRC replaces Dax Harkins in the top job at NS&I. Harkins was appointed in April 2023 after working as head of savings for Australian bank AMP.

A spokesperson for NS&I said: ‘We recognise that dealing with bereavement can be challenging and would like to apologise to anyone who has not received the customers service from NS&I that they should expect, particularly at such a sensitive time’.

Reiterating the concern, Bell said: ‘I want to repeat NS&I’s apology to its customers and reiterate that every penny of their savings is safe, as always they are 100% guaranteed by the Treasury.’

As well as the scale of problem from a financial accounting perspective, this fiasco puts huge pressure on the bereaved families.

Sam Grice, CEO and founder of Octopus Legacy, said: ‘The emotional toll of navigating delays, errors and unresponsive systems at such a vulnerable time is significant, and in many cases entirely avoidable. Bereaved families should not be left dealing with uncertainty or forced to fight for access to funds that should be straightforward to release.

‘Financial institutions and businesses have a clear duty to make this process as seamless and compassionate as possible. When that fails, it doesn’t just create inconvenience, it adds to the distress of an already difficult time.

‘There is a real need for wider change across the estate administration process, with better systems and clearer institutional accountability. Too often, the burden is placed on individuals at the worst possible moment, when it should sit with the institutions responsible.’