Panic over death of pension book

MILLIONS of pensioners face a race against time to open bank accounts as the Government prepares to phase out pension books next month.

The Department for Work and Pensions has admitted a quarter of pensioners and people who receive benefits still haven't opened bank accounts.

Current benefits and pensions books will run out at the end of February, from which time recipients will be required to have their money paid into a bank account or Post Office account.

By mid-November ? the Government's latest figures - 2.1m people still hadn't opened an account.

The Government does have an 'exception service' which will allow people to receive a weekly cheque, but Help the Aged has accused it of deliberately keeping quiet about the service and bullying pensioners into opening an account.

A spokeswoman for the charity said: 'We know that many thousands of older people have real problems with the practicalities or the very concept of bank accounts.'

She said the Government should promote the 'exception service' rather than forcing the elderly to open accounts. 'The Government is not providing enough information for older people about even the existence of the exceptions service. Help the Aged have heard examples of individuals being bullied into direct payments even though they cannot cope with the changes. This is unacceptable.'

Robert Stansfield, general secretary of the National Federation of Retirement Pensions Association, warned the change would cause distress to unprepared elderly pensioners.

He said: 'There's no way they are going to get everybody signed up to an account in time. Even if people were young and athletic they couldn't do it.

'It's going to cause a lot of difficulty to pensioners, which is being compounded by the fact that so many Post Offices are being closed down.'

Consumer groups are also concerned pensioners will be forced to use fee-charging cash machines at Post Offices rather than withdrawing money over the counter. The DWP wants pensioners to carry only small amounts of money , despite the fact this could meas frequent withdrawals from cash points, which can charge up to £1.75 per transaction.

The DWP is working with groups representing the elderly to encourage more pensioners to open accounts. A spokeswoman said it was in the process of contacting people who haven't yet opened an account to discuss their options.

A DWP spokeswoman said: 'We have set a target of having 85% converted and we are confident of meeting and exceeding that.'

Switching to direct account payments will save the Government millions of pounds a year in administration costs, but the DWP claims it will also be safer for pensioners. It says £50m is stolen each year from benefits books, with 100 books a week stolen from pensioners.