Village post offices will face a challenging future whether or not changes are made to the way pensions and benefits are paid.
That’s the view of Social Care Minister Chris Robertshaw who confirmed his department was looking at alternative ways of paying pensions and benefits including a system of pre-payment cards.
‘We are looking at viable alternative options,’ he told the Examiner.
The island branch of the National Subpostmasters’ Federation, which held an emergency meeting last week, has warned branches would close if customers can no longer cash their pension books and vouchers for child benefit and other allowances at the post office.
Isle of Man Post Office says the Department of Social Care is one of its retail network’s largest customers and it hopes the department will consult over any planned changes.
But Mr Robertshaw said his department was responding to the increasing trends for pensioners to have their pensions paid direct into their bank accounts. Some 90 per cent of new pensioners now opt for that method.
He said his department was looking at alternatives for those who don’t have bank accounts, including a system of pre-payment cards.
The Minister said a new system would not be introduced for another 12 to 18 months and it would be introduced slowly to not cause distress for the elderly used to the traditional method of cashing their pensions at their local post office.
Mr Robertshaw accepted the department would make savings by stopping the payment of benefits through the post - and any new system introduced would have to be cheaper.
About £74 million of pensions and benefits are handled through the Post Office each year.
The Department of Social Care pays Isle of Man Post Office about £500,000 a year for the service.
He said aware the Post Office was seriously considering corporatisation, his department had felt ‘duty bound’ to bring to its attention that ‘the market was changing and they needed to be cautious about future profit projections’.
Mr Robertshaw said: ‘There will be an increasing core of people who opt for bank payment. We recognise these fundamental and powerful trends will happen regardless of whether or not we do anything.’
Asked whether he was concerned about the impact the changes would have on village post offices, he replied: ‘I fervently hope that as the Post Office develops its business model, be it logistics or retail, that they are successful in both areas.
‘But they have a serious challenge in maintaining viability in their retail side and I hope they are able to find a model that works.’