The data, contained on two computer discs, was lost in the mail and has stoked fears of widespread identity theft.
The British government today revealed it has lost the private and sensitive data of 25 million of its citizens, reports BBC.com .
Two computer discs holding the personal details of all families in the UK with a child under 16 have gone missing.The Child Benefit data on them includes name, address, date of birth, National Insurance number and, where relevant, bank details of 25m people.Chancellor Alistair Darling said there was no evidence the data had gone to criminals - but urged people to monitor bank accounts "for unusual activity".
In an emergency statement before Members of Parliament (MPs), Darling said the data breach occurred when junior officials at HM Revenue and Customs (HMRC), which is responsible for paying children's benefits, failed to observe security protocols when sending two computer discs by mail to the National Audit Office.
The discs, according to records, never arrived.
The reaction was immediate from the opposition Tory party , which said this crisis will put an end to Labour's push for a national identity database.
The BBC quoted Shadow Chancellor George Osborne, who sized up the crisis:
"Let us be clear about the scale of this catastrophic mistake - the names, the addresses and the dates of birth of every child in the country are sitting on two computer discs that are apparently lost in the post, and the bank account details and National Insurance numbers of 10 million parents, guardians and carers have gone missing.Half the country will be very anxious about the safety of their family and the security and the whole country will be wondering how on earth the government allowed this to happen."
Paul Gray, chairman of the HMRC, has resigned due to the incident.