InvestmentsOct 29 2014

NS&I inundates adviser with correspondence

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

A financial adviser has cited “awful” service from National Savings & Investments after receiving 78 individual cheques when he closed his children’s savings accounts.

Chris Budd, managing director of Bristol-based Ovation Finance, said it came after he closed the Children’s Bond accounts belonging to his two children, aged 11 and 13.

The bonds had been taken out by their grandmother, and Mr Budd decided to cash them in and reinvest them early this year.

The children’s grandmother had deposited differing amounts for the two children on each birthday and Christmas since they were born. Each deposit was given a separate policy number.

However, the state-owned organisation sent Mr Budd 78 individual cheques in separate envelopes instead of consolidating the bonds into the minimum possible cheques.

Mr Budd also said he had to go through a lengthy application process to withdraw the funds.

He said: “The administration was terrible. With the relatively small returns that NS&I is able to pay, it should cut as many costs as possible and try to be more efficient.

“If this were a business in the private sector, it would have changed the system a long time ago.”

He added: “If NS&I had been a client of mine, as we are fee-based, we would have invoiced well over £1,000 for time.”

Mr Budd was unable to remember whether the cheques were sent first class or second, but with the cost of a first and second class stamp 62p and 53p respectively, the total cost of sending 78 separate letters would have been £48.36 for first class or £41.34 for second.

It is not known what the average cost of processing a cheque would be, as a spokesman for the Cheque and Credit Clearing Company said there were so many different processes, depending on each bank. However, he said: “The central processing costs are estimated to be in excess of £200m a year.”

Right to Reply

Jonty Alone, corporate and media relations manager, NS&I, said: “Children’s Bond customers can hold several different issues of the product. Upon request for repayment of an individual Children’s Bond or multiple Children’s Bonds by warrant (like a cheque), we send a warrant for the value of each individual Bond. This is why it is possible for an individual customer to receive multiple warrants. The parent or guardian who is responsible for the child’s Bond can choose to manage it online and by phone, and Children’s Bonds can also be managed by post.”