Why can’t we buy Premium Bonds for our great grandchildren?

Buying Premium Bonds for a grandchild makes for a great present – with monthly prizes from £25 to £1 million on offer. But National Savings & Investments, which last week appointed a new boss, is frustrating many buyers by rejecting their applications and returning their cash without providing any explanation as to why they have been turned down.

The Mail on Sunday first reported this issue at the state-owned savings bank in January, when Group Wealth & Personal Finance Editor Jeff Prestridge had two out of three purchases of Premium Bonds bought on behalf of his grandchildren and a friend’s grandchild rejected.

The bonds were bought as Christmas presents, but NS&I said that not all orders could be fulfilled because ‘evidence of identity requests’ sent to the parents were not completed by its deadline (the country was gripped by postal strikes at the time). It meant no Premium Bond Christmas present for grandson Archie, but one for Arthur.

It now seems that Prestridge was not the only grandparent or great-grandparent left frustrated by NS&I’s rigid vetting procedures.

Ian and Elaine Cleg, from Rochdale in Greater Manchester, were caught up in the administrative chaos – not once, but twice.

Missing out: NS&I did not say why Elaine and Ian Cleg failed to receive Premium Bonds for Poppy and Miller

Ian, 81, and Elaine, 80, give each of their nine great-grandchildren £30 of Premium Bonds on their birthday and at Christmas.

They bought bonds for Summer, 13, Poppy, 9, and Miller, 6. While Summer gratefully received her gift and wrote a letter of thanks to her great-grandparents in January, her sister Poppy and brother Miller got nothing.

Elaine was flummoxed. She says that their father, Christopher, had previously provided all the information required as part of the savings organisation’s evidence of identity request. She called NS&I to ask why it had banked their money, but only issued bonds for one child.

She says: ‘I wanted to know what on earth was going on. It was a nightmare just getting through and took half an hour of hanging on the phone.

‘Then a recorded message kept asking questions about why I wanted to talk about Premium Bonds, but not then transferring me to the right department.

‘Eventually, I got hold of someone, but they talked as if it was all my fault.

‘Customers should not be held responsible for NS&I’s service failures.’

In February, the couple finally got the £60 returned to their bank account – but without an explanation. By now, it was time to give Summer another £30 of Premium Bonds for her birthday.

At the same time the great-grandparents applied again for bonds in the name of Poppy and Miller. But their frustrations continued.

While Summer’s application was accepted, Poppy and Miller again received nothing. Elaine says: ‘The children talk to each other. They were now starting to wonder what was going on. Poppy and Miller even thought they might have upset their great-grandparents, resulting in no gifts.’

Failing to issue Premium Bonds given as presents to children, grandchildren and great-grandchildren is not the only NS&I glitch.

Customers are also experiencing problems with new security measures for its website, which are designed to stamp out fraud.

In August last year, it introduced a two-factor authentication process whereby savers must be sent a code before they can make purchases on the NS&I website.

Social media is awash with messages from victims of administrative hiccups. Among them is Premium Bond saver Will Hunt.

The 66-year-old property developer from Hitchin in Hertfordshire says: ‘I was buying bonds online, but the computer kept kicking me out for no reason.

‘I called NS&I and was told it was having problems with browsers Google Chrome and Explorer – and that I should try Firefox instead. But I still could not get access. It seemed to be a problem with the software.’

Eventually, Will discovered that his purchase had gone through.

NS&I and administrative problems go hand in hand. Three years ago, it was forced to pay almost £1 million in compensation as a result of poor service.

After cutting savings rates to the bone in November 2020, it received more than 40,000 complaints as a result of its call centre going into meltdown – with emails and letters left unanswered.

Many customers remain unimpressed. NS&I’s rating on consumer review website Trustpilot is rock bottom – one star out of five – with the vast majority of reviewers describing the service as ‘bad’. On Friday, NS&I said that it was ‘strange’ that siblings living in the same household should not be recognised ‘at the same time’.

Boost: NS&I has made five increases to Premium Bond payout rates in the past 12 months

It added: ‘When someone buys Premium Bonds for the first time, we are required to confirm the child’s identity.

‘We write to the parent or guardian nominated by the purchaser of the bonds and ask for confirmation of the child’s full name and date of birth.

‘If this information is not received within 30 days of the purchase, a sale is automatically refunded using the original purchase method. This process prevents fraud.’

NS&I chief executive Ian Ackerley resigned last month, with Dax Harkins confirmed last week as the new boss.

The prize rate on Premium Bonds is currently equivalent to an annual interest rate of 3.3 per cent.

Though this lags behind the Bank of England base rate of 4.25 per cent, the bonds still appeal to savers as the odds of winning some sort of prize each month are 24,000 to one with just a £1 stake.

NS&I has made five increases to Premium Bond payout rates in the past 12 months.

It said: ‘We continue to review our rates regularly and make changes when necessary.’

NS&I says that if you have purchased Premium Bonds and you or your intended recipients have not received confirmation of the gift within 30 days, you should contact its call centre on 0808 500 7007.

This post first appeared on Dailymail.co.uk