The post office – our bank of last resort

This blog is about the ongoing and increasing importance of post offices for those who cannot bank – or cannot bank online.

I had been under the impression that the Government had stopped using the Post Office to make payments to people who had no bank account. Since April 2022, it hasn’t been possible to use a Post Office Card Account (POCA) to get p benefits paid. The DWP estimated that the numbers impacted were small

  • 5,600 individual child benefit recipients
  • 2,000 individual tax credit recipients

Most of these people who used to get paid through post office counters now use current accounts with high street banks.

But I was pleased to find  that  for those who can’t, the Post Office remains the payment system of last resort.

The DWP makes it clear that getting pensions and benefits paid through the Post Office is a last resort but information is available though it seems you need the web or a phone to find it.

The Payment Exception Service

You can can find out about this service online or by phone using this link

This information is from MoneyHelper.

If it’s not possible for you to have a current account, the DWP will make your payments through the Payment Exception Service. You can receive your payments through one of the following three methods:

  • a unique reference number via a text message (SMS) on your phone
  • a unique PDF voucher via email
  • a Payment Card: the DWP will send you a Payment Card and a welcome letter. The Payment Card is pre-loaded with vouchers that you can use to take out money at any PayPoint retailer or Post Office branch. You do not need a computer or smartphone if you choose this option.

To collect a benefit or State Pension payment, show your card, voucher or text message at a Post Office or PayPoint outlet. You can find your nearest PayPoint retailer on the PayPoint website.

If you have chosen to be paid through emailed vouchers or the Payment Card, you will also need to show proof of your identity to take out your money

Reading this, you realise that the Government is still relying on access to digital technology to get most people who can’t get a bank account – paid.

The issues with bank closures.

Over the weekend, I wrote about the concern expressed – mostly by older people – that banks were closing physical branches, and like the DWP, relying more on digital technology to provide us with services. The blog received a lot of comments, some of which are more interesting than the blog. They included these from Ros Altmann,

Very interesting comments here – I think this all goes to show that there are serious differences among the population and the drive for ‘modernisation’ of banking may suit banks and their shareholders but is truly disenfranchising millions of elderly people.

They will never get online, they often can’t afford a computer and even if they have a mobile phone they can’t afford wi-fi and other connectivity or live in areas without good signal. I think we underestimate the numbers of elderly people who are isolated, often at home, with just shopping, posting a letter or other trips as needed.

Having never learnt to use a computer, those in their 80s and 90s will be around for another 10 or 20 years perhaps, and are unlikely to do so. They would undoubtedly struggle with someone trying to make them go online. So they are being marginalised by society in the name of progress (aka cost-cutting and profit enhancing) for the crime of being digitally disabled. Banking, parking, shopping are all essential services, parts of people’s life, which they should not be excluded from.

I think campaigns to keep bank branches open are fighting a losing battle against the trend to bank online which is leaving branches underused and an expensive overhead. How many mortgagees would prefer better mortgage rates and savers better interest rates than keep redundant branches open.

Managing the transition to online services is not going to be easy, but we do have hope that the improvement in profitability that it will bring in payments can be used in part to manage it.

Broadening wi-fi coverage , subsidizing the cost of getting and staying on-line and giving older people the confidence to do things themselves, or at least to entrust others to do things for them, is part of a just transition to a near universal digital payment system.

There must of course always be a non-digital last resort, though it’s hard to park your car these days and pay cash. Most of the facilities that benefit those who are house-bound depend on the householder being able to order online. Those with limited mobility cannot expect the world to come to them or they to get to the world without the capacity to interact digitally (either in person or through a carer).

As for banks , building societies and credit unions that decide to rely on the post offices for cash payments, there must be investment in the post-office system. The decline in rural post offices that was such a feature of the past two decades must be reversed so that they become the multi-purpose hubs in small towns and villages which replace the bank branch.

The latest Post Office report to parliament (delivered in 2021)continued to see a small but steady decline in post offices in the UK  over the past five years

But at the same time , demand for payments through the post office soared

Hand in hand in investing in helping those excluded to get bank accounts and bank digitally. shouldn’t we also be encouraging a resurgence in post offices. Properly rewarding them for providing payments seems part of this, but encouraging more post offices in areas denuded of banks, seems another.

I’m pleased to see that the unconfirmed numbers of post offices in the UK is now reported (March 2023) at 11.705. Here is the latest coverage distribution


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to The post office – our bank of last resort

  1. ros altmann says:

    Dear Henry
    Of course I have sympathy with what you are saying here, but it seems to me that the assumption that cutting bank branches would mean lower mortgage rates is a herculean stretch! Closing branches means higher profits, bigger bonuses and better pay for staff, rather than feeding through to interest rates for mortgages or savers.
    Just because some people prefer online banking and fewer people visit a branch, does not mean it is ok to close them. Especially in light of the age disttribution of people who are digitally enabled, forcing people to either bank online or not bank at all is either direct or indirect discrimination. Only just over half of the over 65s own a smartphone and a similar proportion of over 75s have been able to use the internet. We all probably know those in the half which can do this, but there are probably over 3 million people in Britain who are being more and more marginalised by the desire for greater profits, ‘modernisation’ and so-called ‘progress’.
    I do think this should be part of a financial firm’s consumer duty for the coming years, while so many people are being locked out.
    Best wishes

  2. Pingback: Payments for the hard of banking | AgeWage: Making your money work as hard as you do

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