Premium Bonds Operator NS&I 'must Work Hard To Win Back Customers'

Premium Bonds operator NS&I will need to "work hard to win back customers" after shoddy service in recent months, MPs have said.

The savings account operator was accused of causing anxiety to customers who waited an average of 20 minutes for calls to be answered in October.

Its boss has apologised for the poor service, in a letter to the influential Treasury Committee.

But the committee's chairman said NS&I's reputation had been damaged.

Accounts with NS&I, which stands for National Savings and Investments, are guaranteed by the Treasury, and raise money for the government.

In response to the coronavirus crisis, it was set targets to raise more. Its comparatively high rates brought an influx of deposits. Nearly £24bn was raised from July to September.

When these rates were subsequently cut, there was an exodus of savers, resulting in a net loss of £9.5bn in funds in the final three months of the year.

At the same time, NS&I announced plans to phase out paper warrants - like a cheque - which are sent in the post to some Premium Bonds winners.

It proposed that prizes should be paid directly into bank accounts instead.

Calls from people wanting to withdraw money, and complaints from those worried about Premium Bonds prize changes flooded in - but call centres were facing their own Covid-related staffing pressures.

The result was long waits for customers on the phone and slow responses to correspondence that led to a "great deal of anxiety" for customers, according to the Treasury Committee.

Call waiting times averaged 17 minutes in September, 20 minutes in October and 19 minutes in November.

In a letter to the Treasury Committee, NS&I chief executive Ian Ackerley said: "I am very sorry for those customers who experienced poor service last year and I am determined to return NS&I to delivering the high quality service our customers have been accustomed to for many years now."

He added that service levels had improved, more staff had been hired and four additional contact centres had been opened.

Regarding the change to Premium Bonds, he wrote: "I regret that we undertook this change at a time when our operations were under stress."

However, he defended the plans - which have been delayed until the spring - saying that they were more efficient and meant fewer prizes would go unclaimed.

Mel Stride, who chairs the Treasury Committee, said: "I would like to thank Mr Ackerley for his frank response, but the damage that may have been done to NS&I's reputation over the last few months is worrying.

"NS&I has a big role to play in helping the government fund the costs of the coronavirus recovery scheme and it will need to work hard to win back customers."