DWP update: Post Office card account change confirmed – what to do if yours is closing

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The DWP will be stopping its contract with the Post Office, meaning those who save with Post Office card accounts will be impacted. The form of saving has been popular in the past, with many people in receipt of state pension payments or benefits such as Universal Credit choosing to receive their sum in this manner. However, more recently, this type of account has fallen out of favour. Although some are still making use of it, there has been a shift which means the accounts will now close. 

People will now have more time to deal with their Post Office card account, but this does not mean they will not have to deal with the account closure eventually.

In fact, Britons are now being urged to prepare more amply now they have additional time on their hands to sort out their affairs in this regard.

Individuals will still get their usual payments, however, they will then be required to use a different banking provider and card in order to access the money from their payment or benefit and withdraw it.

Britons can expect to receive correspondence from the DWP in the form of a letter which explains the details further and what kind of action individuals may need to take.

However, budgeting experts, thinkmoney, have also issued guidance on the matter in order to help people who are wondering what they should do next and what kind of options are available to them.

Firstly, many people are curious as to how they can close a Post Office card account. While there is now not such an urgency behind taking action, many will wish to sort out the matter now to avoid a rush later down the line.

The experts explained people can close their Post Office account using what is known as an Online Closure Form. However, they should find another way of managing their money first before making this leap.

Individuals should only close their old Post Office account once they have determined their usual payments are going into the new account of their choice.

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Those who do not manage to take action to close their Post Office card account themselves will see the Post Office close it on their behalf, and send a letter to confirm this course of action.

However, it will be of particular importance for Britons to withdraw all money in their card account before its closure. This is because otherwise they risk losing access to it in a worst case scenario.

The Department for Work and Pensions (DWP) has now confirmed the extension until November 2022, but after this point, the Department will stop payments into Post Office card accounts.

This extension only applies to DWP customers, and the deadline for HMRC customers (tax credits and Child Benefit customers) to notify HMRC of new account details is still November, 30 2021.

The DWP is currently writing to all customers who currently receive their payments into this card account to let them know the service is ending. They are also encouraging individuals who can open a bank account to do so.

Those who are unable to access these kind of services will be migrated onto a new system known as a Payment Exception Service. 

Minister for Pensions, Guy Opperman, explained: “Whilst the vast majority of pensions and benefits are paid directly into peoples’ bank accounts, some people prefer to collect their payments over the counter at their local Post Office.

“This extra time means we can support our most vulnerable customers to move to the payment method that will suit them best – even if that means making sure they can still get cash via the Post Office using a card from the new Payment Exception Service.”

Thinkmoney experts have acknowledged that switching accounts can be a daunting endeavour, but with enough time and patience, it can be more simple than a person may first perceive.

Individuals are encouraged to explore a number of different accounts that benefits, state pension payments or tax credits can be paid into. This may be a bank account, building society, credit union or digital current account. 

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But it is important Britons select one which is right for them and suits their needs. This may be access to their money 24/7, additional perks, or an account which helps a person improve their credit score.

If switching to the new Payment Exception Service, the Government states pensioners and benefit claimants will be able to choose how they receive their payments.

These methods will include a delivery of digital vouchers via:

  • Text message
  • Email
  • A unique barcode displayed on a person’s mobile phone

The DWP concluded: “In addition, all customers who are migrated from POca to the new service will receive a reusable mag stripe plastic card, which can be used to receive their benefits in cash from more than 28,000 PayPoint retail outlets or 11,500 Post Office branches.

“Extensive work has been undertaken to identify those most at risk in order to provide vulnerable claimants with additional support before the move to the new system.”

It is now thought there are approximately 382,000 active Post Office card accounts still open. 

This article has been updated as it previously stated: “The Department for Work and Pensions (DWP), alongside HM Revenue and Customs (HMRC) has now confirmed the extension until November 2022, but after this point, both Departments will stop payments into Post Office card accounts.” However, this is incorrect as the extension only applies to DWP customers, and the deadline for HMRC customers (such as tax credits and Child Benefit customers) to notify HMRC of new account details remains November 30, 2021.

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