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Credit Transfer

Volume 82: debated on Monday 1 July 1985

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asked the Secretary of State for Social Services what estimate he has made of the financial advantage to his Department of using automated credit transfer and retaining pension money for longer than if it is supplied to the Post Office to fund payment by order book.

On average, payment of pensions by automated credit transfer rather than by weekly order book produces a financial advantage to the Department from retaining the money longer of rather less than ½ per cent. of the amount paid out.

asked the Secretary of State for Social Services what is his latest estimate of the annual cost of paying pensions by automated credit transfer against the annual cost of payment by order books.

We estimate that in 1984–85 it cost £9·00 to pay a retirement pension by four-weekly automated credit transfer and £18·20 by weekly payment by order book.

asked the Secretary of State for Social Services if he will now assess the additional offsetting savings that would accrue from beneficiaries accepting automated credit transfer on the basis of payment two weeks in advance and two weeks in arrears instead of four weeks in arrears.

There would be offsetting savings only if the change led to an increase in the number of beneficiaries accepting payment by automated credit transfer rather than by order book. The extent to which this would happen can only be conjectural and no reliable figures for the saving can be given.