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MPs warn of confusion over the "Direct Payment" of pensions and benefitsThe Trade and Industry select commit-tee has delivered a serious blow to the government's plans to pay pensions directly into bank or building society accounts, by declaring that the proposals have "created confusion and uncertainty" amongst many older people.
The criticism follows the committee’s investigation into the so called' Direct Payment' scheme, which is aimed at phasing out the existing order books and giro-cheques payable at post offices, by 2005.
In their latest report entitled People, Pensions and Post Offices, the committee concluded that whilst for those who prefer to conduct their day-to-day financial affairs through their bank ac-counts, the new system would provide amore convenient means of receiving their pension - for a significant number of people, the traditional system of payment would remain the best option.
At present, nearly five million older people collect their pension at their local post office, and of those, one million have never had either a bank or building society account.
The report criticised the government for causing confusion amongst the elderly by not taking account of their needs and failing to understand the impact that such a change would have on their lives.
Much of this anxiety could have been avoided had ministers implemented an effective public information campaign advertising the new scheme, before it began to send out letters inviting people to choose how they wished to receive their pension and asking them for their bank details.
Even the new Pensions minister, Malcolm Wicks, has acknowledged the situation by admitting that for many people "do nothing" is the best option available to them at the moment .
However, critics say the planned changes are more to do with reducing government expenditure than helping older people get their pensions.
Rodney Bickerstaffe, National Pensioners Convention (NPC) president said: "There is no doubt that this new policy is being driven by the Treasury, who see the direct payment scheme as a way of saving money."
"Yet one of the reasons the select committee has found fault with the proposed system is because we were not consulted before the government decided to introduce it."
Once again we see the government telling older people what is good for them rather than asking," he added.
The NPC is concerned that the government has yet to decide both how pensions will be paid to those individuals who, for whatever reason, cannot open up a new account and how the changes will affect those individuals’ who currently get their pension collected by a different third party every week.
The NPC will be raising these issues with the minister responsible.
