Good news for rural post offices

Three thousand post offices could be saved from closure following the announcement minutes ago that the Post Office would retain its £1bn benefits contract which faced competition from a private firm, Paypoint.

Work and Pensions Secretary James Purnell told MPs today that post offices were "at the heart of the community" and he would do "nothing to put the network at risk". He said the Post Office will retain its £1bn five-year contract to distribute benefits to 4.3m claimants, beating competition from private firm PayPoint.

The National Federation of Sub Post Masters has warned that 3,000 post offices would close if the Post Office Card Account service was taken away.

The account, used by more than four million people, was designed to do away with the need for giros and payment books for pensioners and benefit claimants, while still allowing them to use post offices to collect money.

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