11-12-03
Scrapping Pension Book leaves Edinburgh Post Offices with 15,000 fewer customers
John Barrett, Liberal Democrat MP for Edinburgh West, today revealed alarming new figures, showing that local post offices in Edinburgh will lose over 15,000 customers, directly because local pensioners will in future collect their pension at banks and building societies.
The Government is writing to all pensioners and benefit claimants who pick up their money at the post office, telling them to choose one of three 'direct payment' options. It is estimated from the House of Commons library that 47% of pension book users are opting, when asked, to have money paid into bank and building society accounts rather Post Office card accounts. This corresponds to over 15,000 people in Edinburgh alone.
Many pensioners have reported being talked into signing up for new bank accounts. Internal Government documents reveal that staff are under pressure to persuade customers into this option.
In a statement, John Barrett, whose petition campaign to save the pension book has been backed by over 5,000 people across Edinburgh, said:
"Tens of thousands of pensioners in Edinburgh have made the conscious choice to collect their pension with a pension book. Yet the Government is forcing them to choose one of new payment options, despite overwhelming opposition both locally and nationally.
"These astonishing figures show the impact which these changes will have on our local post offices in Edinburgh. Scrapping the pension book will rob local post offices of the revenue from 15,000 customers. It will only serve to accelerate the rate of post office closures which I and many others have been campaigning hard against.
"It is still not too late for the Government to think again, to listen to pensioners and allow them to keep their pension books."
ENDS
Notes to Editors
1. The Government's Payment Modernisation Programme involves writing to all pension and benefit claimants who do not have their money paid directly into a bank or building society account. The 'invitation' offers three payment options 1) Direct into a normal bank or building society account 2) Direct into a new basic bank account, and 3) Directly into a Post Office Card Account. Pensioners are NOT being given the option of retaining their pension books.
2. The new figures commissioned from the independent House of Commons Library are based on the responses from pensioners and benefit claimants who have already received the Government's 'invitation'. The new figures predict the outcomes when the Government's programme is completed in 2005.
3. Of the 16.4 million benefit recipients who will be approached 5.6 million of them will be pension book users. The House of Commons Library figures predict that 2.85 million of them will opt for a normal bank or building society account and that 2.75 million of them will opt for either the Post Office Card Account or will qualify for the exceptions service. Therefore the post office could lose out on revenue from up to 2.85 million customers.
4. In Edinburgh, there are 32,125 pensioners who collect their pension with a pension book at the post office. 47% of this figure is 15,099, the numbers of pensioners who will likely opt for a bank or building society account, taking their custom away from post offices.
5. The Post Office will not receive any revenue from customers who withdraw their cash from a normal bank or building society account via the provider's branch, nor will they receive revenue from customers who opt for a basic bank account and get their money from the bank or building society that provides the account. The post office will receive a fee for customers who are able and choose to access the money via a basic bank account at the post office. NOTE the Government does not know how many customers who have provided their bank details are opting for normal or basic accounts.
6. An internal DWP document states:
"In order to meet Business Case requirements we need to move quickly toward getting 9 out of 10 customers who make a new claim onto Direct Payment. Any further delay will cause overwhelming backlog in 2004/05 impacting on field performance...we also need to pay most of these customers into bank accounts which cost 1p rather than into Post Office card accounts which cost at least 30 times more... emphasis[e] Post Office [card accounts] is probably not the best option for customers."
7. The new figures also show that very large numbers of pension and benefit claimants are not responding to the Government's 'invitation'. Of the 6,553,600 pension and benefit customers who have been asked to respond to the invitation, only 4,686,339 have so far done so.