Poor service led to complaints from some customers that they could not get answers to their questions.
In November NS&I made sweeping cuts to most of its savings products and reduced the Premium Bond prize-fund rates from the December draw. Prior to the cuts its rates were market-leading.
The cuts meant the rate on the Direct Saver account fell from 1% gross to 0.15% gross and the rate on Income Bonds was cut from 1.15% to 0.01%. The rate paid on 3 year Guaranteed Income Bonds was cut from 1.25% gross to 0.36%.
NS&I said at the time it was reducing rates to reflect market conditions and align rates with competitors.
Before the cuts NS&I saw a surge in business but staff hit by the pandemic struggled to cope.
NS&I’s chief executive, Ian Ackerley, said the organisation was determined to get better on service.
He said: “NS&I is determined to restore normal levels of customer service following the operational challenges we have faced.
“Due to changed government funding requirements, in the first six months of 2020-21, NS&I raised more net financing than in the whole of the previous three years, despite reduced staffing levels due to the impact of the Covid-19 pandemic.”
The drop in rates meant that in the third quarter (October-December 2020) NS&I Net Financing for the Treasury was down by £9.5 billion giving a year-to-date total of £28.8 billion.
The government revised NS&I’s Net Financing target (the money it raises for the Treasury spending) in July 2020 from £6 billion to £35 billion. NS&I is now expected to deliver a lower level of Net Financing.
NS&I has 25 million customers.