This week, Post Offices across Britain began to feel the effects of a shake-up hailed as the "death of the pension book". From now on, instead of an over-the-counter service, the new Government payment system will see pension money paid directly into a bank, building society account or Post Office Card Account.

But for Post Offices and pensioners alike, there is a price to pay.

BEFORE the demise of traditional communities, milkmen and postmasters were not only relied on for their goods and services, but also advice and local gossip.

And according to local pensioner, John Hinton, this invaluable source of knowledge often helped him along in his job at Worcester City Council.

Which is why plans to consign Britain's 100-year-old pension book to the dustbin by 2005 has gone down like a lead balloon with many of Britain's elderly as well as angry postmasters, who rely on their weekly visits from the over 60s for a hefty chunk of their income.

Initially, the Government's "cost-cutting" move meant pensions would be paid directly into normal bank and building society accounts.

But after lobbying from the Post Office, whose postmasters receive 40 per cent of their income from benefit transactions, pensioners also have the option of drawing their money via a Post Office Card Account.

Those choosing a basic bank account or POCA will still be able to go down to their local post office and tell the cashier how much they want to withdraw.

The card will then be swiped and the customer asked to type a unique personal identification number (PIN) into a pad on the counter.

Cash can also be withdrawn from basic bank accounts at hole-in-the-wall machines or at the post office, but direct debits and overdrafts are not allowed.

Already, of the 1.3 million people in Britain who were invited to change the way they receive benefits, 500,000 provided existing bank details and 100,000 opted for a POCA.

Many of them have already tested out the new system, which went "live" on Tuesday.

But claims are being made that pensioners are being pushed into opening a normal bank account, instead of helping to support their local post office.

Steve Webb, the Liberal Democrats' pensions spokesman, said many people receiving a letter believe they must supply bank details.

"The Government should stop harassing pensioners and, if they choose a post office card account, that choice should be respected," he said.

Tenbury's postmaster Malcolm Chase argued much of their income depended on these payments and if they were lost, they may as well shut up shop.

"Our customers may think they must have their pensions and benefits paid into a bank or building society account," he said.

"This is not true, they can still have them paid over the counter in cash if they complete the appropriate form, but this has not been sent to them."

Spokesman for Post Offices Ltd, Dan Panes, echoed his words, saying the move would ultimately mean the loss of jobs.

"Commercial pressures on businesses and organisations which have traditionally allowed customers access to services of the Post Office have seen the move in favour of other methods of payment," he said."

"While their stakeholders and constituents will quickly applaud these cost-cutting moves, there are hidden consequences for the Post Office network.

"This trend towards electronic/unmanned payments means there is simply not enough custom to support the current number of offices in towns and cities, which will directly affect the number of local branches."

On a community level, the "death of the pension book" - as it has been coined - will mean exactly that - the sad extinction of one of the last links to a more sociable, neighbourly society.

Choice ultimately means change and Tony Blair's new convenient methods will no doubt make a dramatic difference to people's lives.

Whichever option they choose, pensioners in Worcestershire will start receiving letters asking for their new method of payment from May.

Mr Hinton, from Victoria Avenue, St John's, Worcester, opted for the "convenient" bank account option when he qualified for his pension more than a decade ago.

His wife Iris, on the other hand, has been collecting hers from London Road Post Office for the same number of years.

"It's out of habit really and she is going to change over when they ask for new payment details next month," said 78-year-old Mr Hinton.

"But I can understand why people will be upset by the death of the pension book.

"We have had some very, very good postmasters in the area who give a lot of people advice and help.

"Like the old fashioned milkman, who always kept you informed, this could all change."

So, all that remains to be seen is whether Worcestershire takes the new system in its stride, or like Tyne and Wear, pensioners here flatly refuse to hand in their beloved pension books.