£9.5bn loss for National Savings

DISGRUNTLED savers pulled a record £9.5billion from troubled investment giant NS&I amid a meltdown in queries over interest-rate cuts.

MPs fear National Savings and Investments has ruined its reputation by struggling to handle a torrent of calls from customers.

Treasury committee chairman Mel Stride yesterday said it should have foreseen a mass exodus after imposing rate cuts on its 25million customers in November.

Call waiting times soared to an average of 20 minutes as savers tried to move their money out.

At the same time, the Treasurybacked bank announced it was to stop sending Premium Bond prizes in the post and asked customers to register bank details instead. It was accused of forcing older savers to bank online after it announced it would stop sending the cheques in the post to save paper and money.

New figures showed NS&I lost £9.5billion in three months after announcing interest rates would be cut to as little as 0.01 per cent.

MPs on the Treasury committee demanded answers over the customer service crisis and the justification for scrapping the treasured postal prizes.

Chief executive Ian Ackerley yesterday apologised to MPs and said customer service standards had been hit by the pandemic.

In a letter to the committee, he said the bank’s call centre staffing levels had been hit by virus restrictions and were unable to cope with a surge in deposits as lockdown led to Britons saving an extra £168billion. He admitted it had been a bad time to change the prize system, but refused to back down. The switch is due to happen in spring.

Mr Ackerley said the scale of withdrawals after rate cuts was ‘unexpected’, but Mr Stride said it should have been ‘foreseeable’.

He told the committee: ‘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.’