Glitch Leaves 350,000 NS&I Savers Waiting up to 6 Months for Payments

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February 2022
Glitch Leaves 350,000 NS&I Savers Waiting up to 6 Months for Payments (1)

Glitch Leaves 350,000 NS&I Savers Waiting up to 6 Months for Payments

A botched systems upgrade at National Savings & Investment (NS&I) left hundreds of thousands of savers waiting up to six months for interest payments and Premium Bonds prizes, the government-backed provider confirmed.

The error affected 349,000 customers with over £1.1 billion of savings in Direct ISAs, Direct Savers, Income Bonds, Investment Accounts, and Junior ISAs. The glitch also affected the payment of nearly 1,000 Premiums Bonds prizes worth £27,175.

NS&I confirmed that after it updated its systems in July 2021, wrong dates were applied to deposits. This impacted deposits made into 349,000 Direct ISAs, Direct Savers, Income Bonds, Investment Accounts, and Junior ISAs between 19 July and 29 September 2021.

In most cases, deposits were credited to accounts between one and five days after they were actually made. This impacted the amount of interest customers earned.

NS&I said that affected customers with Direct ISAs, Direct Savers, Investment Accounts and Junior ISAs had their accounts automatically updated with any backdated interest payments in January of this year. Income Bond customers had any interest due paid as part of their January or February dividend payments.

A spokesperson for the Treasury-backed savings provider said: “Following an update to NS&I’s systems in mid-July, it was discovered that, when customers were investing in NS&I products, the incorrect date for the sale was being applied to the transaction in some cases. NS&I apologises to all customers affected.”

Additionally, the incorrect dates meant that some customers who purchased Premium Bonds between July and September were not entered into the first drawing in which they were eligible. That means they missed out on prizes they might have won.

NS&I is checking affected Bond numbers against winning prize numbers. If will notify the 999 affected prize winners and pay out missing prizes through their chosen payment method, with 8% interest as a result of the delay. However, it couldn’t confirm when the payments would be made.

“Retrospective prize checks have been run on the affected Bonds, and customers will be notified in writing by NS&I of any prize wins,” the spokesperson said.

NS&I said the fault had been fixed and accounts have been updated with the correct investment date, with the appropriate payments backdated.

NS&I serves 25 million customers, who have deposited £202 billion. However, it’s been plagued with customer service issues over the last few years. 

Instructed to raise £35 billion for the government’s coronavirus relief efforts, NS&I maintained healthy interest rates through the early months of the pandemic, even as competitors slashed rates. 

This meant it was deluged with deposits—a net increase of £38.3 billion between April and September—just staff transitioned to working from home. 

This left customers waiting days to deposit and withdraw money and facing up to 40 minutes on hold to speak to staff. Then, a rate cut in November drove an exodus—customers withdrew £9.5 billion over three months—that again overwhelmed staff.

NS&I apologised for the failings and ultimately paid nearly £1 million in compensation to customers who were inconvenienced.

NS&I savers stayed at rock bottom rates throughout much of 2021. But as the coronavirus crisis has ebbed and the Bank of England hiked the Base Rate, it has slowly raised the rates it pays again. Earlier this month, in its third hike in just four months, NS&I announced that it will push the rate on its Direct Saver and Income bounds from 0.35% to 0.5%. 

Sources