Pensioners “being forced” to open bank accounts
16/06/2008
Hundreds of thousands of pensioners are being told to open bank accounts if they want to continue getting their state pension, according to Britain’s biggest pensioner organisation, the National Pensioners Convention (NPC).
Currently around 400,000 over 60s still receive their weekly or monthly state pension payment through a giro cheque that can be cashed at their local post office. Until now ministers have accepted that this arrangement could continue, but the NPC has learnt that letters are being sent to these pensioners telling them that the giro cheques are being withdrawn in 2010 and that they will have to have their pension paid directly into a bank account.
The NPC, which opposed the scrapping of the original pension book back in 2003, believes that this latest move will not only further undermine the viability of hundreds of local post office branches resulting from a loss of income, but will also seriously restrict the ability of pensioners to manage their day-to-day financial affairs.
Cheques are issued to the pensioner’s home address on a regular basis to match the current frequency of their benefit or pension payments, either weekly or monthly. If the individual cannot collect their pension in person, they can sign the back of the cheque to indicate that they have asked someone else to cash it on their behalf. The person cashing the cheque will also have to sign and provide suitable identification.
Dot Gibson, NPC vice president (and who is one of the 400,000 pensioners currently receiving her pension by cheque) said: “For many older people, the cheque payment enables them to easily get a friend or neighbour to collect their pension on their behalf. It’s a flexible approach that helps those who may not always be able to get to the post office in person.
“Lots of older of older people don’t have, don’t want or cannot open a bank account – but they want to keep using their post office to collect their pension. It’s outrageous that the government is now making it difficult for pensioners to get at their own money. The decision to withdraw the cheque payment is yet another attack on both the pensioner and the post office.”
The NPC believes that the government is unable to legally stop paying pensions, simply because an individual does not have a bank account, and is considering a legal challenge to this latest move. In the meantime, they are advising those affected to ignore any letters advising them to give up their giro cheques in favour of opening a bank account.
On 15 February 2006, James Plaskitt MP, Department for Work and Pensions minister told the House of Commons: “It is not the Department’s policy to stop an individual’s pension payments if he or she refuses to receive pension payments by the direct payment method. Customers who do not provide account details are paid by cheque.”