Are Premium Bonds REALLY handing out enough prizes to savers?
No airs and graces: new NS&I boss Dax Harkins
It is the nation’s savings bank that more than 24 million of us entrust to take care of our hard-earned money during these trying times. Safe as houses.
But despite our money pouring into its product range in torrents, the government-backed National Savings & Investments (NS&I) continues to disappoint — and draw criticism from some quarters.
Most of the opprobrium comes from customers who have fallen victim to the creaky service – leaving them stuck on the phone for ages or requests for products being rejected. But it’s also coming from those who feel it’s not doing enough for interest rate savers.
None other than Lord Young, Chancellor of the Exchequer in David Cameron’s coalition government, took to the letters pages of a national newspaper last week to list NS&I savings rates.
In response to Treasury Secretary Jeremy Hunt drafting plans to force the big banks to pass on interest rate hikes to customers, Lord Young wrote: “So when will he let his own bank — NS&I — do what he wants other banks to do? ?’
While NS&I pushed rates up in the wake of Lord Young’s diatribe, they’re still nowhere near good enough to upset Money Mail’s best savings bargain table – compiled by Sylvia Morris.
Given NS&I’s central role in the savings market – setting the gold standard for banks and building societies – should NS&I do more for savers?
In fact, it should lead in terms of rates and, as it clearly states in its recent annual report, inspire a ‘stronger savings culture’.
It’s the first question I put to Dax Harkins, the savings giant’s new 51-year-old boss, in an exclusive interview for Money Mail.
Although you wouldn’t guess it from his first name (see box), Mr Harkins is Liverpool through and through.
Despite living in London for nearly 30 years, he maintains a healthy Scouse accent which he says is accentuated when he heads north to watch his Liverpool football team play.
In his eyes, manager Jurgen Klopp can do no wrong – he is a genius. Too bad he can’t say the same about the piggy bank he now oversees.
While Mr. Harkins is much younger than many of NS&I’s seasoned savers, he has been with the savings bank for 20 years and along the way has gained knowledge in key areas such as sales, product development and outsourcing back-office functions.
He was given the numero uno job in March when CEO Ian Ackerley retired after six years at the helm.
Mr. Harkins is instantly sympathetic. There are no airs or grace to him. He’s clearly nervous – it’s his first interview with the press – and he rambles off what he wants to say at machine gun speed.
Premium Bond tables: check who won big and how much they had in bonds
Payouts: Premium Bond’s prize rate has risen seven times over the past year, putting it at 4% – the highest level in 15 years
Yet everything he says seems sincere and he has a sense of humor – a character trait not normally associated with savings organization executives.
‘Yes, I saw that [Lord Young’s letter],’ he says when I challenge him. ‘There is a lot of stories about this important issue [savings rates] currently. But from my perspective, I’m proud of how responsive we’ve been in a really dynamic savings market.”
He then quickly rolls out a series of stats to support what he just said: seven increases in the price percentage of Premium Bonds in the past year, taking it to the highest level (4 percent) in 15 years; a record July prize pool of £373 million; another record pot in August; and rate increases on its line of floating-rate savings accounts (the latter, which applies to Direct Saver and Income Bonds, soon rose to 3.4 percent).
He’s not done yet. ‘Look, we responded to interest rate changes in a timely manner. Look, Premium Bonds, they are by far the country’s favorite savings product.
“I think we’re encouraging the nation to save. We respond. We offer fair rates and that helps us set the broader savings agenda.
“Helping the nation save is a core part of what we do.”
And just before I think he’s run out of steam at this point, he has one last blast: “It’s hard to ever do enough in terms of savings.”
But be responsive [as an organisation] is an important driver to encourage people to save.’
After getting all that off his chest, he takes a deep breath. Sermon over. I suspect he’s been rehearsing those lines for the past 24 hours.
Lagging inflation: Many critics believe that NS&I is not doing enough for savers in terms of interest rates
In defense of Mr. Harkins, the figures in the weighty annual report indicate that NS&I is persuading people to save.
For example, in the year to April it attracted net savings (deposits minus withdrawals) of £10bn – more than the £9bn cap set by the government. And for the coming year, the highest target is higher: £10.5 billion.
The big banks, on the other hand, are draining deposits – and rightly so, given the appalling rates they pay many loyal savers.
Unfortunately, NS&I isn’t always good at handling the money flowing through its doors (mainly online or electronically) – or for that matter when depositors are rushing for the exit. It can create the potential for acute customer service issues in its contact centers – all in the UK.
In 2020 Money Mail’s sister section in The Mail on Sunday (Wealth & Personal Finance) elicited a ‘very, very sorry’ from the then NS&I boss Mr Ackerley after presenting him with a pile of correspondence from readers who were not satisfied with the service they had received.
Boss asks me: Who is your mole!
Suspicions: Harkins is convinced we have a mole within NS&I
Dax Harkins is convinced I have a mole within NS&I. This is because I have regularly managed to predict increases in Premium Bond prices days before they happen.
He says, ‘Yes, I asked my team: who is the leak? I open your newspaper and read that the prize money is increasing before we officially announce it. If it’s not a birthmark, then it looks like you’ve come up with a system that tells you when we’re moving on courses. Let me know your secret.’
According to the latest NS&I accounts, Mr Harkins earned between £180,000 and £185,000 in the year to April.
But only one month was spent as chief executive. This year he is likely to be closer to the £300,000 his predecessor Ian Ackerley earned.
Mr Harkins (whose first name comes from a character in a 1960s novel by Harold Robbins) was introduced to Premium Bonds at the age of six when he won a painting competition (he drew a picture of the Queen riding in a gold carriage in Liverpool arrived).
The £50 Premium Bond award was presented to him by Ken Dodd.
When Mr. Harkins became CEO of NS&I in March, he had to sell all of his holdings. “It hurt,” he says. ‘Happy memories.’
Nevertheless, problems remain. In May of this year, Money Mail revealed that many customers who called NS&I with questions were on hold for more than 30 minutes and were sometimes cut off.
It was a service meltdown similar to that experienced by users of Her Majesty’s Revenue & Customs self-assessment tax helpline.
We also reported on customers losing access to their online accounts after new security measures failed — and applications for Premium Bonds (often submitted on behalf of children) being rejected without explanation.
NS&I’s latest results confirm that it fell short of its target for customer satisfaction over the past year – with an overall satisfaction level of 74 percent, below the target of 84 percent.
There’s no “really, really bad” moment this time, though Mr. Harkins does immediately apologize when I challenge him about the organization’s recurring customer service issues.
“I’ll never be happy if we don’t hit any goal,” he says. ‘Customer service is central to us. i know some [people] don’t have the service they expect and what we strive for.’
He then adds, “To all those readers who have been affected [by poor service], I would like to personally apologize. We are absolutely focused on improving our service.’ It’s an apology made with meaning.
Reassuringly, he says it took an average of 34 seconds for calls to be answered in June, with more than 85 percent answered within 30 seconds.
Like many companies, Mr. Harkins says issues with both staff retention and recruitment have hurt customer service standards.
While the four contact centers – located in Birkenhead, Durham, Glasgow and Lytham St Annes – are managed on behalf of NS&I by French outsourcing giant Atos and will remain so until March 2025, he says all blame rests entirely with NS&I.
‘Yes, Atos is our outsourcer,’ he says. “But if we don’t meet our customer service goals, we should acknowledge that.
“We have to keep improving customer service. We want to respond faster to customers and be more scalable, flexible and flexible as a company.
“We need to make sure NS&I continues to help save the nation.”
It’s a final message delivered with feeling – and he clearly means it.
But ultimately, the impact of NS&I on the nation’s propensity to save will not be determined by Mr. Harkins alone.
As Lord Young says, it will be decided by his political masters.
jeff.prestridge@mailonsunday.co.uk
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to compromise our editorial independence.