...and hundreds are locked out of online accounts
A FOUR-DAY computer meltdown at National Savings and Investments has been blamed on a ‘technical issue’ that led to a flood of customers being blocked from accounts.
It’s not known how many of its 24 million customers were unable to log in to access savings accounts and Premium Bonds on Saturday, but hundreds reported they were still blocked until yesterday when the problem was sorted out.
despite speculation the major IT glitch was caused by a cyber attack, the Government-backed savings giant is adamant this was not behind the chaos caused for customers. NS&I initially blamed heavy online traffic and systems updates but later admitted to a technical issue.
NS& I introduced two- factor authentication into its account log-in process two years ago as an extra layer of security to try and stop hackers from stealing data. Customers now get a one-time passcode sent to their mobile phone to log in to their account.
Tina deeming, 64, of Loughborough, Leicestershire, was blocked by NS&I on Saturday morning from getting access to vital funds by cashing in £500 worth of Premium Bonds. The retired IT consultant says: ‘I was greeted by a message stating there were intermittent log in problems. I tried many times over the weekend and got very frustrated as I need the money for groceries and the rent.’
As late as yesterday lunchtime customers trying to log in were still being greeted with a ‘We’re aware of an intermittent issue with our website while logging in and are working hard to fix this. Thank you for your patience and sorry for any inconvenience this may cause.’
eddie ferguson, 77, a retired IT manager from Stockport, Greater Manchester, was also one of the many that contacted our sister website This Is Money reporting a problem after trying to log in over four separate days. eddie says: ‘It is pathetic. The idea of introducing double-authentication to ensure the system is safe is a great one – but only if it actually works.’
The length of the delay indicates possibly a more serious problem with a computer system meltdown or a cyber attack.’
NS&I would not comment on how many customers were blocked from logging in. It said some problems may also have been caused by ‘time drift’. This is when the device you are using to log on, such as a laptop, is out of sync with the mobile phone to which an authentication code is sent. To solve this it suggests you check time and date settings on your phone and make sure it has updated.
I have a feeling that National Savings and Investments (NS&I) is either going to have to increase its Premium Bond prize rate or launch an enticing new product this year to attract savers’ cash.
That’s because it has revealed details of its new British Savings Bond, announced with much fanfare in the spring Budget. and it turns out to be a damp squib — nothing more than another threeyear bond with a mediocre rate.
as I predicted, the Guaranteed Growth Bonds and Guaranteed Income Bonds went on sale in the first week of april with a rate of 4.15 pc a year, or 4.07 pc if you want your interest paid each month.
Industry insiders tell me NS&I could face difficulty in encouraging savers into these new bonds.
For a start, three-year bonds tend to be unpopular. almost all savers prefer easy-access accounts or one- year bonds. For example, three-year deals make up a mere half a per cent of money going into hargreaves Lansdown’s savings platform because savers want easy access and shorter term bonds.
If savers don’t snap up these British Savings Bonds, NS&I will have to do something else to attract us to its products. That’s why I think more prizes for Premium Bond holders, its bestseller, could be on the cards. Let’s hope it also does more for Isa savers, too. all NS&I offers is its easyaccess Direct Isa at a lousy 3 pc.
The Government-backed bank has a lot of work to do when it comes to attracting savers.
The Treasury wants it to bring in £9 billion (in a range of £5 billion to £13 billion) of new money in its current financial year. It also needs to hold on to the money currently in its popular one- year bond, which comes up for maturity later this year.
If NS&I doesn’t come up with a competitive replacement, that money could fly out of the door, leaving NS&I short of its target.
although the rates on the British bonds are poorer than others in the market, I still think some savers will be tempted. That’s because you can put in between £500 to £1 million and all of it is guaranteed by the government.
This makes the bonds popular with wealthy savers, as banks and building societies cover a lower £85,000 of savers’ cash as part of the Financial Services Compensation Scheme (FSCS), so you can put all your money with NS&I instead of having to spread it around numerous providers and keep tabs on several accounts.
But, if you do go for the British Savings Bonds, watch out for tax. The way they are structured means you do not need to have much saved before you risk incurring a tax bill, as I explain on page 31.