The way pensions and benefits are paid to claimants in the UK is undergoing a radical change in 2021.
The Department of Work and Pensions (DWP) in the UK announced in May 2020 that it would no longer be paying benefits and pensions into Post Office card accounts. This means that recipients who collect their payments that way will have to seek alternative arrangements to receive their money.
However, the DWP is phasing out the use of Post Office card accounts gradually, giving people plenty of time to open up a new account. Here’s what you need to know about Post Office account closures:
When Will Payments Stop to Post Office Card Accounts?
The DWP will stop making payments into Post Office card accounts from November 2021. A Post Office card account is also known as a POca and is a dedicated account for DWP and HMRC payments, such as pensions and benefits. Among the payments made into a POca are state pension, Universal Credit and tax credits.
It’s worth noting that you will continue to receive these payments from the government, but you will be unable to withdraw the money using a Post Office card account.
What Happens to Your Post Office Card Account Next?
The DWP has been paying benefits and pensions into Post Office accounts since 2003, but that contract expires in 2021. The government will have written letters to pensioners and benefit claimants to explain that payments will no longer be made into POcas.
This means that people with Post Office accounts should now look at alternatives if they haven’t already. You will need to have a new account opened and ready to receive benefits and pension payments from November 2021.
What Are My Options for Replacing my Post Office Account?
Luckily, several options are open to you if you need to find a new account to receive benefits and pension payments.
You can set up payments into a regular current account with a bank or building society. Payments like Universal Credit and state pension are made through an automated system, so you will need to find an account that can receive them.
Basic Bank Accounts
These can include a current account, basic bank account or prepaid card. A basic bank account is like a current account but does not offer an overdraft or credit card, meaning it is easier to open as it doesn’t require a credit check.
Current accounts and basic bank accounts will supply you with a debit card. You can also have benefits and pension payments made onto a prepaid card you can then use as a debit card.
Prepaid Debit Cards
You can apply for a prepaid debit card online and depending on the provider, you may also set up regular payments from the card to pay for rent, utilities and other recurring bills. If you cannot open a suitable account to receive government payments, you should contact the DWP for further guidance.
Alternative Banking with Suits Me
At Suits Me, we believe in financial inclusion and that everyone should have access to a banking solution in order to manage their money, regardless of their background, personal circumstances, or financial history.
Our accounts are personal e-money current accounts that work similarly to a traditional bank account, without the overdraft facility. You’ll gain access to online banking and our mobile banking app, where you’ll be able to manage your money on the go, 24/7.
We also offer a whole variety of banking features including:
- The ability to set up standing orders and manage direct debits,
- Send money within the UK via a bank transfer, international transfers are available via a partner in the Suits Me app,
- Gain access to our exclusive cashback reward programme where you’ll automatically get a percentage of your money back when you use your Suits Me debit card with our retail partners.
As mentioned previously, opening a Suits Me account takes 10 minutes, and you’ll gain access to your online banking, account number, and sort code, immediately so you can start managing your finances and payments. We accept 99.8% of all applicants – so if you’re looking for a suitable alternative banking solution to replace your Post Office Account, then apply today!
Additionally, all those who are experiencing POca account closures will get their first month free with Suits Me! All you have to do is open your account and send us proof that you’re a post office account customer.