Page last updated at 15:01 GMT, Thursday, 24 September 2009 16:01 UK

Cheque guarantee to end in 2011

Cheque being signed
Cheque use has been in rapid decline

The cheque guarantee card system will end on 30 June 2011 although it will still be possible to write a cheque, an industry body reveals.

The guarantee is noted on a card using a hologram picture of Shakespeare. Its demise had been announced but this is the first time a date has been set.

Only 7% of the 1.4 billion cheques written last year were guaranteed under the system which began in 1969.

The use of cheques is generally regarded as being in terminal decline.

However, no date has been set for cheques to be completely phased out, with many people still sending them in the post or using them for payments such as after-school clubs.

A report on the future of cheques is expected by the end of the year. The Payments Council, which oversees payments issues, said it would not phase out cheques until it was confident that alternatives for the vast majority of current cheques uses had been identified and were accessible and acceptable to users.


The 24 banks and building societies in the UK domestic cheque guarantee card system decided on the date as part of a coordinated rundown of the system.

The alternative was to let the scheme wither on the vine which was more likely to have led to confusion and mixed messages
Jacqui Tribe, manager of the guarantee scheme

Even after June 2011, businesses will still be able to accept cheques. However, many - including all the major UK supermarket chains - have chosen to stop taking them as shoppers turn to debit cards or stick with cash.

"Now an industry-wide date has been set we can look to support customers through the change by providing information on what this will mean," said Jacqui Tribe, manager of the guarantee scheme.

"The alternative was to let the scheme wither on the vine which was more likely to have led to confusion and mixed messages."

The original guarantee limit 40 years ago was £30. Nowadays, 88% of all cheques in the UK have a £50 or £100 guarantee limit.

In July, HSBC said that its 300,000 customers who had a £250 guarantee limit on their cards would have this limit reduced to the standard £100 for most other customers.

HSBC said it wanted to cut losses from cheque fraud and to discourage people from spending money they did not have.

Graphic showing changing methods of payments

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