London, 08:20 GMT, Feb 1, 2026
- NS&I is considering ways to limit connections between its legacy and new IT systems as part of its overhaul
- The programme is expected to fall short of its March 2028 deadline and exceed the agreed budget
- NS&I has also warned that key easy-access savings rates will be cut starting Feb. 12
Britain’s state-owned savings bank, National Savings & Investments, is exploring ways to reduce the effort needed to link its aging IT systems with new services as it attempts to revive a delayed tech overhaul, CEO Dax Harkins told the Public Accounts Committee in a letter. The project is now expected to finish “outside the March 2028 target date and outside the agreed budget.” NS&I aims to complete an options analysis by the end of March, after which ministers will decide on a revised delivery plan. UK Parliament Committees
The reset is significant since NS&I stands as one of the government’s key retail funding sources, collecting money from savers via products like Premium Bonds. With around 25 million customers holding more than £240 billion, it functions as an executive agency under the chancellor’s supervision, monitored by the Treasury, the National Audit Office noted.
In November, the NAO revealed that NS&I had seriously underestimated the project’s scope, with costs soaring to £3 billion—up from the initial £1.7 billion—and completion pushed back to March 2028, about four years late. NAO chief Gareth Davies bluntly stated the bank “underestimated the scale of this challenge.” National Audit Office (NAO)
Started in 2020 under the name “Project Rainbow,” the overhaul aimed to replace a single-outsourcer setup by dividing work among multiple contracts, The Register reported. Atos continues to play a key role, with a £474.4 million deal covering core banking and payments until March 2028. Capgemini acts as the systems integrator, overseeing the coordination of suppliers’ systems, the report said. The Register
HM Treasury has signed off on extra public funding to back the programme, PublicTechnology reports. The department approved £40 million in additional resource spending and £69 million in capital spending from the government’s Contingencies Fund, though parliamentary approval is still needed. Officials are pushing for guarantees on key risks before releasing the cash.
NS&I’s role in funding has been expanding. In late November, it raised its 2025-26 “net financing” target — the net amount raised for the government after outflows — to £13 billion, plus or minus £4 billion, alongside gilt issuance from the Debt Management Office. Harkins said: “Our pricing is designed to meet this revised target and maintain market stability.” NSI Corporate
In response, NS&I announced it will slash rates on its Direct Saver and Income Bonds accounts starting Feb. 12, dropping the annual equivalent rate (AER) to 3.05% for both. Retail director Andrew Westhead commented, “We keep all our savings rates under review as market conditions change.” NSI Corporate
Premium Bonds don’t pay interest but enter holders into a monthly prize draw. According to NS&I’s website, the odds stand at 22,000 to 1 for each £1 bond number, with an annual prize fund rate of 3.60%.
Cutting integration between old and new systems isn’t without risk. Speeding up delivery might just shove complexity into future migrations. And any hiccups in payment processing or customer access can quickly turn into political headaches when millions of savers are at stake.
NS&I highlights that its products come with a full Treasury guarantee, unlike bank deposits, which are protected only up to a set limit. The institution is working to maintain steady day-to-day services as it once again revamps its programme.
