The post office card account is run for the government by post office to provide a simple way for people on benefits and pensions to get their money.  

The current Post Office card account contract ends in March 2010 and the Government has decided that there will be a new replacement service after 2010. 

The government has said it has a legal obligation to tender competitively for this product, in order to ensure that best value for money for the taxpayer is achieved. That process is now well underway and ministers have informed me that a decision will be made on this later this year.

The government has been clear that the replacement account will need to be available on a national basis and accessible to those who need it. We have also asked for it to be available through ATM cash machines as well as at around 10,000 'teller outlets', similar to post office counters, around the country.

Ministers are bound by strict rules to ensure that the bidding process is fair and that taxpayers interests are protected. However, the Post Office have made it clear that they have put in a strong bid for the new account which uses their post offices.

The Government has reassured MPs that they remain committed to allowing people to access their pension and benefit in cash at the post office if they choose to do so.

Post Offices are important to local communities. The Government has invested £2 billion since 1999 to support the network and will now provide a further £1.7 billion up to 2011 to help keep post offices open.