Retirees may be missing out on state pension payments during lockdown, former pensions minister warns

29 April 2020

Just 27,000 people have been contacted directly about alternatives to getting benefits in person

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Pensioners and benefits claimants could be running out of money because they do not know about alternatives to collecting their cash in person, a former pensions minister has warned. 

Around 900,000 retirees and those on benefits get their payments in cash at a Post Office counter using a Post Office Card Account. But the coronavirus lockdown means many of this group have to stay at home.

The Department for Work and Pensions (DWP) launched a scheme to send these groups cash instead, but this only launched last week and has directly contacted just 27,000 people.

What does this mean for vulnerable people?

Thousands of vulnerable and elderly people may feel they must pick between running low on cash, chance contracting coronavirus by going to the Post Office or use riskier methods to get hold of their cash, according to Steve Webb, partner at pension consultants LCP.

Some pensioners could also be increasing their risk of being scammed if they give their card and PIN number to someone else to get cash on their behalf.

Webb says that while more people are using contactless payments than cash at the moment, pensioners who use Post Office accounts and are reliant on physical money could be struggling.

What solutions are there?

Webb wants the Government to offer more alternatives to pensioners who are having trouble getting their cash safely.

He says: “It is good that DWP has special schemes to help people obtain cash in these difficult times.  But with nearly a million people normally getting pensions and benefits in cash via a Post Office, it is worrying that less than 30,000 have been contacted directly by the DWP to discuss alternatives. 

“There must be a concern that some pensioners feel they have no choice but to break shielding rules in order to get cash from a Post Office, or that others are simply going without.” 

Steve Cameron, pensions director at Aegon, says: “While the Government has taken action to support the most vulnerable pensioners with a solution to access their state pension, there are many more who aren’t able to access payments without venturing out to the Post Office which of course comes with health risks.

“The state pension is often an individual’s main source of income in retirement, and for some their only source. An alternative payment method needs to be in place as soon as possible to protect this group."

Caroline Abrahams, charity director at Age UK, also says more needs to be done to help elderly people.

She says: “We know that older people rely on cash to pay for things in a safe way, especially if someone is doing their shopping or they need to pay a tradesperson for an emergency repair.

“It’s important that the Post Office continues to identify ways their older Post Office Card Account holders can receive their payments to ensure that no older person is left without the cash they need.”

Government reaction

But the DWP hit back and said it is doing enough to help.

A DWP spokesperson says: “This is an unfair and inaccurate interpretation of the Government’s swift action to support the most vulnerable. 

“We are committed to supporting people through these challenging times, working closely with the Post Office and National Shielding Service, to ensure everyone is protected.

“We’ve contacted tens of thousands of pensioners who have no alternative payment arrangements in place, and a range of other payment options already exist for hundreds of thousands of Post Office card account holders.”

How is the Post Office helping pensioners?

The Post Office is delivering pensions to vulnerable people who are unable to leave their homes because of the coronavirus pandemic.

Around 1.5 million people who are considered 'extremely vulnerable' have been advised to stay at home for at least 12 weeks because they would be most at risk of hospitalisation if they caught coronavirus. 

When pensioners request their cash they will get it delivered directly to their door by 9pm the following day.

Pensioners who can use the scheme will be contacted directly by the DWP which is working in partnership with the National Shielding Service.

How to make alternative arrangements for payments

If you have a Post Office Card Account and have not been contacted by the DWP it is possible to make alternative arrangements.

Appointees - An individual can be authorised by the DWP to act on a customer's behalf if they are incapable of managing their own affairs. You can find out more here.

Permanent agents – You can nominate someone you trust to become a permanent agent on your account who will be given their own card and PIN to collect cash on your behalf. To nominate a Permanent Agent, you have to complete a ‘Permanent Agent access form’ (P6163), available from most Post Office branches.

Changing method of payment – You can change your payment method to a standard or basic account. The DWP has been writing to Post Office card account users since 2015 to request that they change their payment method to a standard account.

The Payment Exception Service – This is a way for people who do not have a bank account to collect benefit or pension payments via PayPoint outlets.

Where customers require urgent assistance they will be contacted by a DWP Visiting Officer, who can - in exceptional circumstances - arrange for payment to be made via Royal Mail Special Delivery.

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