Premium Bonds provider NS&I is making some major changes (Image: Getty)
Premium Bonds provider NS&I has shared an update about some major changes to its structure. This comes as the Government-owned savings provider has been heavily criticised by MPs for putting taxpayer funds at risk.
Premium Bonds remain a hugely popular savings product, with millions of savers investing in the scheme. Each £1 Bond goes into a monthly prize draw, with an equal chance of being paired with a prize, currently at 22,000 to one. Large cash prizes on offer include amounts such as £50,000 and £100,000, or you could even win a £1million jackpot. The vast majority of prizes are for small amounts such as £25 or £50.
NS&I has now come under fire for its ill-fated digital modernisation plan. The Public Accounts Committee, a group of MPs who oversee state spending, has blasted the programme as a “full-spectrum disaster”.
NS&I has already spent five years on the improvement project to modernise its operations and reduce running costs. The group spent £111million on the scheme up to March 2024, the equivalent of four years’ worth of Premium Bonds jackpot prizes. There are always two £1million prizes in the monthly prize draw.
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Following major delays and the plan being deemed unachievable, the scheme has been undergoing a ‘reset’ since 2024, with few improvements delivered. The final bill was estimated at £3billion in 2024, an increase of £1.3billion from the original 2020 projection. The committee warns that “further increases are likely once the reset is complete”.
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, said: “NS&I’s original name for its troubled digital modernisation effort was Project Rainbow. It is perhaps unsurprising that this upbeat name for the scheme was retired, as aptly our report finds it has been a full-spectrum disaster.
“It is deeply worrying to see a project in such an important organisation so off-track that neither this committee, or at times the Treasury itself, could gain an accurate sounding on costs and progress. NS&I did not have the skills to run this project successfully to begin with, leaning on expensive consultants while overseeing a programme which still has yet to bring any meaningful benefits as costs continue to pile up and the taxpayer exposed to unacceptable risks along the way.”
The committee has urged NS&I to report to them with more information about how the programme will work and the costs involved. Asked for a response, an NS&I spokesperson said: “We welcome the Public Accounts Committee’s report and recommendations.
“Our business transformation programme is key to NS&I continuing to deliver cost-effective finance for Government and the services customers want. We are working on options to improve programme delivery and will provide an update on this in due course.”
The group went on to explain some of the changes it has achieved to date. The spokesperson said: “In 2025, we transferred some 750 customer service agents and a further 350 back-office staff to a new supplier. We have also begun the rollout of our mobile app to our new partner’s solution ready for the next stage of its upgrade and launched the technical ‘architecture’ that links our new multi-supplier model together.
“We are on track to raise £13billion this year to help support public services across the UK and deliver over £2billion in savings compared to raising funds via gilts.”
The group also said that the work to rebuild 25 years of complex IT infrastructure has been “more difficult than we originally envisaged”. NS&I said that its products have raised £31billion for the Government over the past three years, delivering £3.2billion of savings to the taxpayer, looking at the value indicator which compares the cost to the Treasury of raising funds via NS&I versus via gilts.