Post Office plan would leave pensioners 'stranded'Post Office change threat to pensions.

27 February 2006

MPs have warned that pensioners will be 'stranded' by government plans to remove support for the Post Office card account.

They also warned that hundreds of sub post offices could be at risk after the Department for Work and Pensions (DWP) refused to renew the GBP 1 billion contract when it expires in 2010.

The account - which replaced pension books last year - is used by 4.5 million people in the UK to draw pensions and benefits at post offices.

But the DWP claims that paying claimants by card account costs GBP1 per payment compared with 1p via a bank account.

Labour Leeds East MP George Mudie told the House of Commons that scrapping support for the accounts was a 'questionable' decision'.

He protested: 'This will leave 4.5 million pensioners stranded, the majority of whom were persuaded to give up pension books on the basis of Post Office accounts being available.

Ministerial pond life

'With no bank nearby they will have no ability to get their money. It will also question the viability of inner city and rural post offices.'

But Commons leader Geoff Hoon said that the government were looking at 'ways in which the support that rightly must be given to pensioners is made available.'

However, this cut little ice with Tory Shropshire North MP Owen Paterson: 'At no stage was it ever mentioned that the card, despite all the Government's attempts to bully people into direct payments, once it was established wasn't going to be permanent.

'Driving down on Sunday I heard some form of ministerial pond life suggesting that it was only temporary - I didn't catch the minister's name. I am amazed that you come here today and say this was intended to be a temporary scheme. At no stage was it ever discussed.'

But Mr Hoon retorted that he had used the word interim not temporary and added: `If you'd used the word interim, which is the word I used, then you would recognise that what we were talking about is moving from one sensible arrangement to another.'