National Savings & Investments (NS&I), a Treasury-owned bank, is facing increased dissatisfaction due to poor customer service and outdated technology. Managing the savings of 24 million people and holding £231.3 billion in savings, NS&I has seen a surge in complaints from disappointed customers.

NS&I has missed its customer satisfaction targets for three of the past four years. Issues include long phone wait times, difficulties logging in, and challenges in opening new savings accounts. Complaints rose by 37% last year, reaching 33,655 from the previous 24,569.

Sam Richardson from the consumer group Which? highlighted the concern, stating, “NS&I is funded by taxpayers, so it’s troubling to see such substandard customer service. The bank needs to improve to meet customer expectations.”

NS&I, established in 1861, is well-known for its Premium Bonds, where savers can win prizes ranging from £25 to £1 million. One of the main attractions of NS&I is that deposits are entirely guaranteed by the Treasury, contrasting with the £85,000 cover provided by the Financial Services Compensation Scheme for high street banks.

However, the bank’s reputation has plummeted, ranking 46th in February last year before improving slightly to 36th this year. On Trustpilot, 88% of 3,496 reviews rated NS&I with just one star out of five.

Problems began during the pandemic in November 2020, when NS&I slashed its savings rates to as low as 0.01%, after previously being a top performer. This led to a mass withdrawal of £12.5 billion by savers between November 2020 and January 2021. The resulting customer service crisis saw phone wait times average 40 minutes, prompting scrutiny from the Treasury Select Committee.

Service issues have continued, often peaking after rate changes or new account launches. In August 2023, a one-year bond offering 6.2% interest resulted in 225,000 savers depositing £10 billion. Post-launch, nearly 16% of calls to NS&I were abandoned by frustrated customers.

James Blower from The Savings Guru commented, “NS&I consistently fails to understand the savings market dynamics, attracting high demand with good rates and losing customers when rates drop.”

The bank has attempted to bolster staff to address these issues, but cited challenges in the customer service recruitment market. NS&I employs 496 people in its call centre, with staffing levels fluctuating during peak periods like March and October.

Technological shortcomings have also frustrated customers. A two-factor authentication system introduced in 2022 has created login issues, negatively impacting customer satisfaction and increasing call wait times. The NS&I app has been criticized for its limited functionality, earning a 1.4 out of 5 score from 2,300 reviews on Apple’s App Store.

Blower noted, “NS&I has lagged technologically because smaller banks can adapt faster. Previously, reasonable phone service masked this deficiency.”

NS&I acknowledged the need for improvement, stating it is transforming its business to offer more choices and flexibility, including app and website enhancements.

According to Fairer Finance, NS&I scored 55% for digital services in February, compared to 84% for Chase and 70% for Monzo, with an industry average of 60%.

Blower advised, “Until substantial improvements are evident, savers should avoid NS&I unless rates are exceptionally attractive.”

In December, NS&I announced a significant revamp, replacing its IT consultancy Atos with Sopra Steria under a new six-year, £276 million contract for customer services. IBM was awarded a five-year, £112 million contract to enhance digital services, aiming to transition NS&I to a digital-first, self-service bank.

Dax Harkins, NS&I’s chief executive, stated that these changes would “significantly enhance customer experience.”

In its annual report published in July, Harkins noted that while most customer interactions are smooth, there is still room for improvement to meet customer standards.