A NEW £250m seven year contract has been agreed by the Government to help protect a key service and help safeguard the future of the Post Office network.

DWP minister, Steve Webb, announced the signing of a new deal with Post Office Limited to ensure the Post Office Card Account remains available until at least November 2021. The service previously was due to be withdrawn in March 2015.

The new contract realises efficiency savings of 10 per cent compared to the previous contract – saving the taxpayer millions of pounds – but the amount of money paid to subpostmasters per transaction will remain the same.

The accounts provide simple banking services for people without a traditional bank current account, to ensure benefits, tax credits, state pensions or war pensions can be received. Around 2.5 million people currently hold one.

Although the vast majority of pensions and benefits are paid directly into recipients’ bank accounts, many older pensioners prefer to collect their pension over the counter at their Local Post Office, and the Post Office Card Account enables them to do this.

The account can be opened without a credit check, meaning people with a poor credit history are able to access the service without difficulty. With no overdraft facility it means account holders can’t get overdrawn and into debt problems. There is also an option to get a second card for someone else to collect their money if they need this.