Barclays set to pay out £12.5m in compensation to customers hit by outages

could pay up to £12.5 million in compensation to customers affected by technology outages over the past two years, according to a new letter sent to MPs. There has been more than 33 days’ worth of unplanned tech and system outages in the last two years for nine of the UK’s biggest banks and building societies, according to new data published by the Treasury Committee.

The committee, a cross-party group of 11 members, had asked the UK chief executives of these lenders to disclose the extent of recent IT failures and provide estimates for customer compensation. It comes after a major outage at the end of January caused days of disruption for Barclays customers, coinciding with payday for many and the self-assessment tax return deadline.

Barclays confirmed that over half of attempts to make online payments during the incident were unsuccessful.

The bank has estimated that it will pay between £5million and £7.5million in compensation for the recent outage, in addition to an expected £5million for other incidents occurring between January 2023 and January 2025.

UK chief executive Vim Maru wrote in the letter published by the Treasury Committee: “We acknowledge that through no fault of their own, some of our customers and clients may have suffered loss or distress and inconvenience.”

The outage was caused by a software issue within a part of the bank’s UK mainframe operating system and was not the result of a cyber attack, Barclays informed the committee.

According to the estimates provided, at least 158 IT failure incidents were reported across nine banks and building societies between January 2023 and February 2025.

That figure does not include Barclays’ recent outage or disruptions to other banks’ online services in recent weeks.

Common reasons given for the incidents include problems with third-party suppliers, disruption caused when systems were changed, and internal software malfunctions.

MP Dame Meg Hillier, chairwoman of the Treasury Committee, said: “The fact there has been enough outages to fill a whole month within the last two years shows customers’ frustrations are completely valid. The reality is that this data shows even the most successful banks and building societies hit technical glitches. What’s critical is they react swiftly and ensure customers are kept informed throughout.”

She added: “I am particularly thankful to those who are compensating their customers well for the stress they endure and would encourage all to reflect on whether they are doing enough in that regard.”