6th November 2017
Update to our original news post 21st October 2016
There has been a lot of confusion as to why the Government might be asking you to open a bank account instead of keeping your Post Office card account (otherwise known as a POCA).
A POCA doesn’t allow you to have things like Direct Debits, and anyone who might claim Universal Credit is being encouraged to change so that they can take advantage of Direct Debits to help them manage their money (because Universal Credit is paid monthly and includes rent payments). Universal Credit will replace Tax Credits as well as other means-tested benefits, so a lot of people will be on Universal Credit in the future.
The Money Advice Service has some helpful information: https://www.moneyadviceservice.org.uk/en/corporate/what-do-i-need-to-know-about-universal-credit-customers-ucrhub
It might be helpful to know that you don’t have to move from using the Post Office, because they also offer bank accounts. See: https://www.postoffice.co.uk/current-accounts
(End of Update 6th November 2017)
Below you can find information provided to Equal Lives from HM Government regarding the requested changes and an image of an letter you may receive asking you to do so:
Supporting DWP and HMRC customers into banking
Why are we asking customers to change from Post Office Card accounts to a bank account?
HM Government is offering support to help customers switch from a Post Office Card account to a bank account to manage their benefits and tax credits payments. Payment into a bank account offers considerable advantages such as reduced utility bills, when paying by Direct Debit, and access to other financial services. By supporting customers to switch to a bank account, the Government is demonstrating its commitment to battling financial exclusion. This is increasingly important for DWP and HMRC with the introduction of Universal Credit. Access to, and responsible use of, bank accounts by working age customers is a key element in this change to enable claimants to manage their full household income.
The banking world has changed since Post Office card account was first introduced. There are less barriers to prevent those on benefits from using bank accounts, including the recent introduction of fee-free basic banking for people who were previously unable to open a bank account. And for those who can’t access financial products and services through mainstream banks credit unions can offer a genuine alternative.
How are we contacting customers?
HM Government are writing to Post Office card account users in phases up to March 2018 about switching to a bank, building society or credit union account.
This is being co-ordinated through a cross-government free phone telephone service set up by DWP, which aims to support Post Office card account users switch to mainstream banking.
As this is a cross government initiative aimed at those who are using a Post Office card account, the letters are branded HM Government.
There have been reports that customers and representative organisations have concerns about the authenticity of letters being issued by the department asking for bank account details. Social media reports and other websites suggesting the freephone number in the letter is a ‘scam’ are inaccurate as a DWP dedicated contact centre has been set up to deal with calls to the number 0800 085 7133. It is important that customers, and representative organisations who have concerns are re-assured that this – and only this – number is genuine.
What do customers need to do?
Customers who receive a letter can call free to provide account details over the phone. Alternatively they can complete the form included with the letter and post it back free using the envelope provided. Customers will also be provided with information about the different types of accounts available to help them choose one that’s right for them. Most bank accounts are accessible at post offices so customers shouldn’t need to change how, or where, they collect their money.
The free phone number 0800 085 7133 (textphone 0800 085 7146) provided in the letter is a dedicated line to support only those customers who receive a letter about how their payments are made and should not be used for any other purpose.
DWP have worked closely with Post Office Ltd to ensure support is available through the post office network for those who require it.