InvestmentsMar 17 2021

NS&I admits to MPs service fell 'well below' standards

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NS&I admits to MPs service fell 'well below' standards

NS&I has acknowledged that its service levels had fallen "well below" its normally high standards but it said it had now “addressed those challenges".

Appearing in front of the Treasury select committee, Ian Ackerley, chief executive of NS&I, told MPs the backlog of customer complaints would take until the summer to clear, but steps had been taken to improve the firm’s service.

Ackerley said they had hired additional call centre staff to increase the capacity of calls and complaints the provider can handle, saying there had been an "improvement in the business” since the measures were taken.

However, it was revealed that between September and November 2020, 40 per cent of callers seeking help and advice from the firm had to abandon their calls, with an average wait time of 20 minutes.

In November 2020 the savings provider cut interest rates for ‘direct savers’, falling from 1 per cent to 0.15 per cent, coinciding with the period of increased caller demand.

Investment account rates were dropped by 79 basis points, down from 0.8 per cent to 0.01 per cent, while income bonds too fell - as much as 115 basis points - also to 0.01 per cent.

NS&I said that the reductions were in an effort to “align” its offerings with rates offered by other building societies and banks.

NS&I themselves reported that the six months to September 2020 saw a 43 per cent increase in complaints compared with the preceding six months.

“It was by far not our best moment” added Ackerley.

Ackerley also said that during the pandemic the provider relied to heavily on “pens, paper and phones” adding that NS&I “had some quite old technology” whereas its competitors were more highly digitised, and subsequently was not able to handle complaints efficiently.

Matt Smith, chief operating officer, added that up to the end of last year, the provider was handling 33 million pieces of paper annually.

“At times last year we were significantly resource constrained” Ackerley said, but he assured MPs that the company’s recovery plan “is on track.”

Recently, NS&I’s premium bonds prize fund rate was recently reduced from 1.4 per cent to 1 per cent, and on top of this, it was revealed that 16 million customers will have prize cheques withdrawn, primarily affecting older savers, and will instead deliver prizes directly to bank accounts.

When asked about the removal of the cheque prizes, Ackerley said that it was “probably a mistake to go ahead with that at that time” owing to the pandemic and subsequent strains on contact centres as well as vulnerable people’s ability to go to banks.

The committee hearing came about after NS&I was told by MPs that it must "work hard" regain customer trust owing to damage done to the company following a bout of complaints. 

In December, Mel Stride, chair of the committee wrote to the chief executive of the state-owned savings bank citing concerns over the bank’s drastic cuts to interest rates, its decision to stop paying Premium Bond winners by cheque and its overall low levels of customer satisfaction.

In the letter to Ackerley, Mr Stride said: “The dramatic cuts that NS&I have made to their interest rates on savings products have also resulted in significant outflows of deposits in recent months, and a great deal of anxiety on the part of customers.