The closure of Post Office card accounts has been delayed.

Customers who collect either a state pension or benefit payments via the card accounts are being given another year to make alternative arrangements for their money after The Department for Work and Pensions took the decision to push the shut down back 12 months because of disruption caused by the pandemic.

Hundreds of thousands of people are still thought to be picking up their money using a Post Office card account (POca) instead of a bank account. Here's what those affected will need to do now:

Who uses a POca?

People who receive either a state pension or some form of benefit may still be collecting that money via a Post Office card account. However the DWP has taken the decision to stop paying state financial support into these types of account, a move initially expected to affect almost one million people when it was first announced.

Accounts were due to close this November but after so much disruption caused by Covid-19, that shut down has been pushed back a year giving people more time to make alternative arrangements for their money.

Government figures suggest that at the start of January more than 590,000 people were using active Post Office accounts. By July, this figure had reduced to 382,000 but this means that many are still not likely to have found other accounts to have their money paid into.

What now?

The DWP is writing to all customers who receive payments into a POca to remind them the service is ending, albeit now at a later date, and to encourage them to begin the process of moving over to a traditional bank account before all payments to Post Office card accounts eventually stop next autumn.

Those more vulnerable customers who are unable to access banking services, for example people with a very poor credit history, will be transferred to something called the Payment Exception Service that will allow users to choose how they now pick up their money.

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."

What is the Payment Exception Service?

Customers claiming some form of state support who are unable to transfer to a bank account will be offered access to the new Payment Exception Service as a way to withdraw their cash.

It will involve drawing out the payments using unique codes and information either sent in a text message, via email or on a barcode sent to mobile phones

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

Checks will be made when customers are moved to the Payment Exception Service to ensure vouchers are being cashed and people are fully aware of how to get their money, says the DWP.

Where to go if you need more help...

Those who need to provide officials with new bank details must contact HMRC’s helplines (0345 300 3900 for tax credits or 0300 200 3100 for Child Benefit) or use your Personal Tax Account to provide alternative account details for where your money should be sent to.

The government is advising anyone who may need help opening a bank account to visit their local Citizens Advice service for further support.

Click here for more details about the Payments Exception Service.

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