Barclays: bank to pay £12.5m compensation for online app outage and login glitches over past two years - news

• Barclays may pay up to £12.5 million in compensation for tech outages over the past two years
• A Treasury Committee report found nine major UK banks had over 33 days of IT failures
• Barclays’ January outage disrupted payments on payday and tax return deadlines
• The bank says the issue was due to a software fault, not a cyber attack
• MPs stress the need for swift action and fair compensation for affected customers

One of the UK’s largest banks could hand its customers up to £12.5 million for technology outages over the past two years, according to a new letter to MPs.

Data from the Treasury Committee reveals that nine of the UK’s largest banks and building societies have experienced more than 33 days of unplanned tech and system failures within the same period.

The cross-party committee, consisting of 11 members, requested UK chief executives of these lenders to disclose the extent of recent IT failures and provide estimates for potential customer compensation.

It follows a major outage at Barclays in late January, which caused days of disruption, coinciding with payday for many workers and the self-assessment tax return deadline.

Barclays said that during the incident, more than half of all online payment attempts failed.

The bank estimates it will pay between £5 million and £7.5 million in compensation for this specific outage, in addition to around £5 million for other incidents between January 2023 and January 2025.

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

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Barclays told the committee that the outage was caused by a software issue in part of its UK mainframe operating system and was not the result of a cyber attack.

Across the nine banks and building societies, there have been at least 158 IT failures between January 2023 and February 2025, according to their estimates.

That total does not account for Barclays’ recent outage or disruptions to other banks' online services in the past few weeks.

Common reasons given for the incidents include issues with third-party suppliers, system disruptions during upgrades, 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.”

Have you been affected by recent banking outages? Do you think Barclays and other banks are doing enough to compensate customers? Share your thoughts in the comments section.