POSTMASTERS in Preston and South Ribble fear for the future of their businesses following the introduction of a new payment system for pensions and benefits.

Anthony Taylor, sub-postmaster at Leyland Lane post office, says the Government's initiative to scrap pension and benefit books could cripple his business.

It comes after the Department for Work and Pensions issued letters to claimants requesting them to open a bank/building society account for direct payments.

While people can still receive cash via the post office, using a card account, Mr Taylor fears the majority of his customers will opt for the bank/building society method.

But if this happens, he claims, he is set to lose a massive percentage of his income from the loss of payment book claimants.

"I don't think we will be able to continue to pay two wages," Mr Taylor said. "There won't be the money coming in."

Other postmasters have echoed Mr Taylor's concerns and fear the shift in customers opting not to use the post office for pension or benefit payments could put them out of business.

Ebrahim Nanavati, sub-postmaster at Acregate Lane, Ribbleton Avenue, Ashton, said: "The future's bleak. We won't know the full picture for another six months but there is certainly the threat of closure."

Kathryn Kerr, who worked at School Lane post office, Bamber Bridge, for 15 years before retiring, believes the move could spell the end of an era for post offices.

A spokesman for the Department for Work and Pensions said: "Anyone who wants a card account will be able to open one.

"There will be no cap on numbers. To date, over 320,000 people have requested a card account -- hardly evidence of the Government 'forcing' people away from the post office."