Plans to phase out cheques are to be re-examined by a committee of MPs after consumer groups voiced concerns that their abolition would hit the elderly and vulnerable.

A Treasury Select Committee inquiry, chaired by Andrew Tyrie MP, will look at how doing away with cheques will affect millions of individuals, small businesses, charities, clubs and hospices.

Under plans put forward by the Payments Council, which is made up of the major banks, cheques were to be abolished by 2018 if suitable alternatives for those that rely on them as a main source of payment had been developed in time.

Mr Tyrie said he was not convinced that the use of cheques was in “terminal decline” as the Payments Council had claimed in front of a Treasury inquiry in February 2010: “The Payments Council has seemingly forgotten about the millions of people who are less at ease with the latest technology.

“We have been inundated by letters from the public telling us that they rely on cheques. Many charities, small business and vulnerable people – including pensioners – depend on cheques. Their needs must be considered. They should not be forced into shredding their cheque books.”

The inquiry will look at trends of cheque usage over time and consider projections for the next ten years. It will also look at the rigour of the Payments Council cost-benefit analysis of phasing out cheques and cheque guarantee cards and study the impact abolition would have on vulnerable groups.

Dr Ros Altmann, director-general of Saga, said: “This will be very popular with older people, many of whom have written to us expressing their concerns that they will not be able to manage without cheques. Many of the over-50s find the convenience of writing cheques is very important to them for managing and organising their finances and keeping track of their dwindling pensions and savings income.”

Michelle Mitchell of Age UK said: “Scrapping cheques without there being a suitable replacement is not acceptable. If you find it difficult to leave the house, then cheques are often crucial in allowing you to pay bills securely and safely.

“Taking that option away could leave many vulnerable older people with no choice but to hand over their PIN numbers and cash cards to others, going against all the guidance given by banks.”

The use of cheques dropped by 12% in the last quarter of 2010 as people increasingly relied on debit and credit cards to pay for goods and services, according to the Payments Council.

Similar Posts:

Share