An influential committee of MPs has ordered Premium Bonds operator NS&I to account for the “anxiety” it has caused customers.
The savings account operator has apologised to customers for poor service levels in recent months.
It recently slashed the chances of a Premium Bond win and cut interest rates, and savers encountered delays when they tried to withdraw money.
The Treasury Committee says it wants reassurances of improvements.
Mel Stride, who chairs the committee, said: “Whilst NS&I took steps to keep service levels up during the pandemic, they appear to have been unsuccessful.
“The decision to stop paying Premium Bond winners by cheque will be particularly concerning to vulnerable consumers.”
Some Premium Bond prize winners still receive paper warrants – like a cheque – in the post when their lucky numbers are drawn.
NS&I, which stands for National Savings and Investments, has said these will be phased out with prizes paid directly into bank accounts instead. The process has been delayed, but will start in the spring.
Premium Bonds are an investment product, bought for £1 each from NS&I and guaranteed by the Treasury. The minimum investment is £25 and the maximum is £50,000.
Investors are not paid interest but instead their Bonds are entered into a prize draw each month where they can win between £25 and £1 million tax free.
As of this month, the chances of winning the jackpot have been slashed. Savers now have a one-in-34,500 chance, against one-in-24,500 previously.
It also reduced the number of £100,000 prizes from seven to four and £50,000 prizes from 14 to nine.
Other products also saw returns cut substantially in late November, NS&I’s direct saver now offers 0.15% interest, down from 1%. The rate on its income bonds fell to 0.01% from 1.15%.
The rate on its investment account dropped from 0.8% to 0.01% and the direct ISA now offers 0.1%, compared with the previous 0.9%. Interest on the junior ISA, for children, fell from 3.25% to 1.5%.
The cuts led to an exodus of savers, but many struggled to get through to take out their money.
The average call waiting time in November was around 19 minutes, NS&I said.
Mr Stride said: “The dramatic cuts that NS&I have made to their interest rates on savings products have also resulted in significant outflows of deposits in recent months, and a great deal of anxiety on the part of customers”.
There were already problems with customer service. NS&I data show that in the six months to the end of September, there was a 43% increase in complaints compared with the previous six months.
NS&I has apologised to customers in a message on its website, saying: “We’re sorry if you’ve had trouble contacting us recently. We understand how frustrating it can be, and we’re working hard to get everything back on track.
“We’re taking a lot of calls, and our website has also had many more visitors than normal. Right now, we’re doing all we can to make our teams bigger, while still following government guidelines so that everyone is safe.”
The Treasury Committee has also demanded answers from NS&I chief executive Ian Ackerley as to why the organisation needed an extra £40.5m advance, funded by the taxpayers, from the Treasury’s contingencies fund for costs, including its Covid-19 response.