24-07-03

Barrett launches campaign to save pension books

John Barrett, Scottish Liberal Democrat MP for Edinburgh West, has launched a major new campaign in his constituency to halt Government's plans to scrap pension books.

The Department for Work & Pensions is changing the way state pensions are paid out.  Over the next two years, every pensioner will receive a letter outlining three options for receiving their pension in the future.  However, retaining the pension book will not be an option.  Pensions must be paid directly into:

• an existing normal bank or building society account;
• a new basic bank account;
• or a new post office card account.

John Barrett has written to local organisations in his West Edinburgh constituency with petition forms to generate support for his campaign to keep the pension book as an option.  It follows his "Save the Post Office" campaign last year, which attracted the signatures of over 10,000 people across Edinburgh.

In a statement, John Barrett said:

"Almost half of all pensioners choose to get their pension using a pension book.  In Edinburgh alone, over 32,000 pensioners still get their pension this way.

"Many pensioners in my own constituency have told me how shocked and angry they were to discover the Government would be scrapping their pension books.  Many don't want to surrender something which they have been familiar with for such a long time. 

"Pensioners are also annoyed that the new systems of payment they are being told to choose between have not been properly explained.  Worse still, there is evidence that those working on the pensions helpline are deliberately encouraging some pensioners to have their pension paid into a bank account.  In some cases, the option of collecting their money at the post office through a new post office card account is not even mentioned.  This is simply not acceptable.

"Just last week, the cross-party Trade & Industry Select Committee published a critical report, attacking the Government for not keeping the pension book as an option.  They concluded that the decision was based on the desire to reduce Government spending with little consideration given to what was best for pensioners themselves.

"The Government has clearly not learnt its lesson from the 75p pension insult of a few years ago.  They still refuse to listen to what pensioners are saying.  Hopefully, this campaign will help force the Government to change their minds and allow pensioners to keep their pension books."

ENDS

Notes to Editors

1. More information on the details of the new automated credit transfer (ACT) system can be found at the Pension Service website at
www.thepensionservice.gov.uk/directpayment/home.asp

2. The Trade & Industry Select Committee in their report on "People, Pensions and Post Offices" said in paragraph 10

"Organisations were concerned that many benefit recipients positively preferred the order book system, and that its removal represented a reduction in customer choice for these people."

They went onto conclude in paragraph 12 that

"The 'old' system offered the choice between a bank or building society account or an order book for use at a post office to collect benefits and pensions. Direct Payment essentially offers the choice between a bank or building society account which may or may not be usable at a post office, or the Post Office card account, but not the order book. It is difficult to see that customer choice has, in practice, been extended significantly. Offering the full range of customer choice would entail allowing those who wish to persist with the order book system to do so."

They also said the decision to move to ACT was based on Government spending, saying in Paragraph 24

"In our opinion, of the reasons put forward by the Government for the introduction of Direct Payment, the expected saving in public expenditure is the most compelling. Indeed, it is difficult to disagree with the conclusion of the National Consumer Council that the introduction of Direct Payment was driven by the objective of reducing government expenditure rather than meeting the basic financial needs of consumers."

3. A copy of John Barrett's campaign petition can be downloaded as a pdf file.