The cheque is to be saved


Cheques are to remain after a huge public response has forced the UK Payments Council to abandon plans to abolish them.

The Payments Council had planned to scrap cheques by 2018 after stating their usage was in "terminal decline" and that it was too expensive to process them.

But after widespread outcry from the public, MPs and charities, the Council says it will keep cheques in circulation "as long as customers need them".


Richard North, chairman of the Payments Council, says: "It's in the DNA of the Payments Council to consult and listen to all those people who actually make payments and use cheques. Listening to over 600 stakeholder groups, working with the banks and following our appearance before the Treasury Select Committee, we have concluded we should reassure customers the cheque is staying."

Read Rebecca Rutt's blog: Saving the cheque

However, Sarah Brooks, director of financial services at Conumer Focus, says although the decision to keep cheques is good news, after the recent withdrawal of the cheque guarantee card – which will lead to more businesses refusing to accept cheques – "we fear an unmanaged decline".

"The 2018 deadline may have gone but if the future of cheques is still uncertain, it is vital that the Payments Council continues to investigate alternatives that work for all consumers. Many retailers should now re-consider their decision to stop accepting cheques in the absence of workable alternatives for customers," she argues.

Public concern

The decision to scrap the cheque should a suitable electronic alternative be found was first announced in December 2009. But the Treasury was inundated with public concern about the use of online technologies, and the huge number of small businesses and individuals who still rely on cheques.

The Treasury's Select Committee reopened its enquiries in April to consider other alternatives and in an open letter written in mid-June, Mark Hoban, financial secretary to the Treasury, said that there was "no credible and coherent case" to get rid of cheques.

Hoban slammed the Payments Council for its handling of the situation and said the decision had been made without a full assessment of the cost or benefits of changing the system.

The guarantee system protecting payments made using cheques was abolished at the end of June and although you can still use cheques, amounts between £50 and £250 are not guaranteed, should the cheque bounced.

Chairman of the Treasury Select Committee, Andrew Tyrie MP, welcomes the announcement and says "it's better late than never".

"The decision to get rid of cheques was taken without having thought through the consequences for millions of people. That was unacceptable. At last the Payments Council is concentrating on the right thing: making the existing cheque system faster and cheaper to operate. This will benefit both banks and to customers," he adds.

How often do you use cheques? Vote in our poll.

Your Comments

Absolutely delighted with this excellent news. There are so many payments that are only really easily dealt with by cheques - my nephews in the army at home and abroad for presents; small services - building projects, painting (£500 average) - not keen on drawing cash for these, new garage doors, charitable donations.

Stop ebay insisting payment by PAYPAL, Yes it is ebays own company.
Insist on payment by CHEQUE only.

Great news! I couldn't really understand why a decision was made to abolish them in the first place. Despite technological advances, cheques are a simple, safe and effective way to pay for services, give as gift and donations. Your poll says it all. The fact that 75% of Moneywise users have used a cheque over the last month shows that this popular payment method is far from dead.

So will banks now reconsider their decision not to guarantee cheques drawn for amounts between £50 and £250? It seems irresponsible of banks to give chequebooks to customers who cannot be trusted to use them responsibly.

small businesses too as well as paying friends/colleagues andthe local traders

Today Tues 26 July we had no electricity in our village. So no light,heating, no card machine.
Saved by cheques and cash

It's a case of winning the battle but loosing the war
The banks should be MADE to reinstate the guarantee cards
Note that their first move was to finish the guarantee cards thereby accelerating the decline of the cheque - how cynical and typical of those whose utter greed have put us all in this mess! And where was the regulation from the FSA they should have stepped in and stopped the irresponsible lending a) of more than the asset [house] was worth and b) more than the lender could afford to pay back. Gordon brown added to the problem by relaxing the regulation and banking greed was set free - it beggars belief.