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Fears for elderly hoarding cash when cheques phased out

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by Kay Mitchell
”Fears

Consumers groups have expressed concern for the elderly if cheques are abolished, suggesting that it will result in them hoarding cash at home.

Appearing before the Treasury Select Committee, Jane Vass, of Age Concern and Help the Aged, warned that there could be a security issue if cheques were to be scrapped.

“This would encourage people to return to cash. We have concerns about large amounts of money kept at home. Older people will be forced to depend on others,” said Ms Vass.

At the end of last year, the UK Payments Council voted to phase out cheques on 31 October 2018, but stated at the time that cheques will not be phased out until an “accessible and acceptable” alternative payment system is introduced.

The use of the cheque book has been in decline for many years as consumers opt for quicker payment methods.

Major retailers such as Tesco and Sainsbury’s no longer accept cheques, arguing that phasing out the use of cheques in stores resulted in quicker service and improved security for consumers.

Figures show it costs up to £1 to process a cheque - four times more than it costs to handle an electronic payment. The move will save banks hundreds of millions each year.

However, charities which represent older people did not welcome the decision and said the scrapping of cheques could make older people vulnerable as they may hoard large amounts of cash in their home.

Furthermore, there was concern that they would give their debit card and pin to someone they did not know very well.

Cheques are still used for payments to sole traders, small businesses, clubs, charities and schools and according to Teresa Perchard, policy director of the Citizens Advice Bureau, 340,000 people still received their benefits by cheques through the post.

Committee chairman John McFall MP questioned whether the “terminal decline” of cheques was in fact a “fudged, managed decline”.

Consequently, the Payments Council has been asked to provide an accurate cost-benefit analysis of the end of cheques.

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