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Last Updated: Wednesday, 12 May, 2004, 13:20 GMT 14:20 UK
Pensioners' payment plan rethink
Pensioner collecting pension
About five million people collect their pension from post offices
Ministers have given way on their plans to have all pensions paid direct into pensioners bank accounts.

The concession, to allow "vulnerable" people to be sent cheques which can be cashed at Post Offices, will be seen as a partial climb down by the government.

Pensioner groups had opposed the switch because some pensioners do not have, or want, bank accounts.

Traditionally pensions had been paid through Order Books which could be taken to a post office.

Alternative

The direct payment scheme into bank accounts is seen by ministers as a more "reliable" and "safer" method of payment.

Pensions Minister Chris Pond said: "We have already announced that we will stop using order books from next year and so we have to protect those vulnerable customers who are genuinely unable to manage an account.

"This is not an alternative option for those who can operate an account but a way of ensuring those who cannot, continue to get their money once the switchover to direct payment is complete.

"We have liaised with groups including CAB, Help the Aged, Age Concern and MIND to try to design the best possible service.

October start

"That's why we will pay those customers concerned by cheque, with enhancements to security."

The cheques can be issued weekly and can be paid into a bank account as well as cashed.

Cheque payments will start in October and until then affected customers can continue to use their order books, the Department of Works and Pensions said.




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