Pensions and Social Security Benefits: Automated Credit Transfer

(asked on 29th November 2017) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, pursuant to the Answer of 26 October 2017 to Question 108977, on Post Office Card Accounts, what the cost per transaction is to the public purse of administering pensions and benefits payments through bank accounts.


Answered by
Guy Opperman Portrait
Guy Opperman
Parliamentary Under-Secretary (Department for Transport)
This question was answered on 4th December 2017

The information requested in respect of the cost per customer and cost per transaction is commercially sensitive.

The total cost of administering pensions and benefits through post office card accounts over the life of the contract is £250.9m from December 2014 to November 2021.

The administration of DWP pensions and benefit payments through bank accounts is managed under the HMRC Government Banking Service Money Transmission Services Contract. The total cost over the life of the contract to DWP is £14.8m from September 2016 to June 2023

In line with our wider policy on financial inclusion we have always made it clear that payment into a bank, building society or credit union is the preferred way pension and benefits are paid. Access to appropriate mainstream financial services, that meet the customer’s needs, is important to support personal and financial independence. There are now fewer barriers to prevent people from using bank accounts. The nine largest personal current account providers in the UK are legally required to offer basic bank accounts to customers who do not have a bank account or who are ineligible for a bank’s standard current account, provided that the customer is legally resident in the EU. Basic bank accounts minimise the risk of unarranged overdrafts and end bank charges if a direct debit or standing order fails.

The Department for Work and Pensions committed in 2014 to maintain Post Office card account until 2021, to ensure that these customers can continue to access their benefits and pensions in this way.

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