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Last Updated:  Monday, 31 March, 2003, 06:15 GMT 07:15 UK
Rural worry over benefit cash
A post office for sale
The new payments system poses a big threat to post offices

Consumer watchdogs say post offices in rural Wales could suffer because of confusion over the way a new system of paying benefits and pensions will work.

From April 2003, the current giro cheques and cash order book system will gradually be replaced by electronic payments for virtually all benefits, pensions and tax credits.

People affected are being given the option of having the money paid direct into a bank or building society account, or opening a new post office card account which will allow them to continue to receive cash over the counter.

The Post Office has spent 500,000 on an advertising campaign to explain the changes, and a series of roadshows is also planned.

But there are concerns that the options have not been adequately explained, particularly to older people who may not be familiar with accounts and card transactions.

According to Nerys Fullerlove, a member of the consumer organisation Postwatch Wales, many people are still unclear about the options.

"I think an awful lot of people don't know what is going to happen," she explained.

"Information has been given out that payments will only be made to bank accounts from 1 April.


"Arrangements have been made so that you can carry on taking payments from the post office, but I don't think a lot of people know that."

Ms Fullerlove added that the potential impact on post offices which depended on benefit customers for their survival would be considerable.

"It is not just the payments," she said. "The loss of business to rural post offices is going to be quite dramatic."

Hefina Owen, a postmistress in the town of Dwyran on Anglesey, is worried for the future of her Post Office business.

"If all the customers do have their money paid through the bank, it's going to mean that the post office will have to close because it will not be viable to keep it open," she said.

The National Consumer Council has also voiced concern.


"The end to cash benefits just hasn't been thought through properly," said Deirdre Hutton of the NCC.

"The new account-opening arrangements take little account of people's real needs and will make it very difficult for people to make the best choice."

The UK government has been criticised by the National Association of Sub-Postmasters for failing to promote the post office card account.

People who wish to receive their benefits through this mechanism must contact a helpline and request an application pack.

"What makes no sense is that people trust the post office, but they can't open either a basic bank account or a post office card account there," Ms Hutton said.

In a statement issued in response to the NCC's comments, the Department for Work and Pensions said it has worked together very closely with the banks and Post Office on the changes.

"We have discussed the changes at some length with customer representative organisations and have listened to their concerns such as having post office access and weekly payments for pensioners."

Dave Barrett, head of Post Office Ltd in Wales, said: "We have spent 500,000 placing adverts in national and regional newspapers in the last three weeks, telling people about the imminent changes.

"We're also holding roadshows in locations around Wales and the rest of the UK in the coming months, and Post Office staff will be on hand to answer any questions people may have."

BBC Wales' Nia Thomas
"Fifteen million people get their benefits and pensions over the counter at post offices."

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19 Jun 00  |  Business

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