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Last Updated: Thursday, 19 January 2006, 09:50 GMT
Rural Post Offices 'face closure'
Pensioner
Millions use the accounts to collect their pensions
Thousands of Post Offices could close throughout the UK because of a government refusal to renew a 1bn contract, sub-postmasters have warned.

The government says it will no longer fund Post Office Card Accounts, which are used to pay pensions and benefits to up to four million people.

They replaced the old system of booklets and cash over the counter.

Rural communities and inner cities could be the hardest hit if the accounts close, sub-postmasters say.

"Nobody actually told us this was going to happen. It was just announced in the Lords last week," said Colin Baker, general secretary of the National Federation of Sub Post Masters.

If you take the Post Office out of the community, the community dies
Colin Baker, National Federation of Sub Post Masters

The decision came despite attempts by Post Offices to modernise the system, he said.

"We've done everything that the government asked of us to make changes needed to make a modern Post Office. We clearly feel betrayed."

Threat to communities

With many people still without bank accounts, Post Office Card Accounts are used to collect benefits or pensions. If these are taken away many post offices could be forced to close as business drops off, sub-postmasters warn.

In response, the Department of Work and Pensions pointed out that the Post Office Card Account was only one of 25 accounts used by people to access pensions and benefits.

Seventy-five percent of customers, the government said, already have their money paid into bank accounts which can be accessed through Post Office counters.

But Mr Baker was adamant that the survival of some Post Offices was threatened and that other businesses could be affected by the closure, such as local hairdressers and chemists.

"If you take the Post Office out of the community, the community dies," he warned.

There are about 14,500 Post Offices and Sub Post Offices in the UK. In the last two years, 2,500 Post Offices have shut down.




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