Take the pain out of the postal strike

Worried about how the postal strike might affect your finances? Here's all you need to know.

Britain's postal service was thrown into chaos this week following a ballot in favour of strike action held by the Communication Workers Union (CWU). Today (October 23) is the second day of the strike, which sees staff who collect and deliver items join those in the distribution centres, resulting in a very limited service.

Special Delivery and Royal Mail Tracked items are still being delivered and Post Offices are remaining open.

Postal workers are striking to protect pay levels and working conditions within the framework of modernisation changes proposed by Royal Mail in 2007. Unfortunately, this week's action looks like it will simply be the start of an ongoing campaign that could wreck deliveries in the run-up to Christmas and create a gridlock of millions of parcels and letters. There's already another strike planned to start on Thursday next week.

The last nationwide strike in 2007 created a backlog of nine million items, according to Royal Mail. This time out millions of utility bills, credit card statements, tax returns and consumer items could end up 'lost in the post' - putting your finances and credit rating at risk. Here's how to protect yourself from the worst effects of the strike.

Credit card statements

Although increasing numbers of us manage our money online, most banks still insist on sending out paper statements for credit cards - which means we often don't tackle our plastic until the statement hits the doormat. What's more, figures from the UK Payments Administration show that 23% all credit card bills are still paid by cheque, mostly posted.

Failure to meet your monthly card repayments can be costly - not only will you be hit with an automatic £12 fine but you could also lose out on any preferential interest rates you currently enjoy. Missing a payment will also adversely affect your credit rating - making it harder for you to secure a cheap deal on credit in the future.

Your first step is to contact your card provider to find out when your next bill is due and what the minimum payment required is (or, if you pay-off your card in full each month, your outstanding balance). You then need to organise payment; if you can't pay online, you should be able to pay over the phone or by cash or cheque at your local bank or Post Office (and don't forget to take the relevant details with you!).

Household bills

We're less reliant than we were on Royal Mail to help us pay our utility bills. Figures from the UK Payments Adminstration show that cheque use for bill repayments has fallen by 57% since 2002. Today 90% of mortgage, TV, satellite and internet bills are paid by Direct Debit and 70% of utility bills are paid by Direct Debit. Even so, if you still pay by post, you'll need to take precautionary action; particularly as you may lose any early repayment discounts you enjoy.

Call your utility company and find out when your next bill is due. Providers will be aware of postal strikes and should be sympathetic to the impact this will have on billing and payment systems. Again, you can pay what you owe direct to your supplier by phone or at most banks or all Post Offices.

Consumer items

A prolonged strike could be disastrous for small online and mail order retailers and their customers. Amazon has already terminated its delivery deal with Royal Mail and other internet giants are expected to follow suit - but that's not an option for millions of small retailers. And it's the poor old consumer who'll bear the brunt of most problems.

Fortunately, existing consumer legislation offers a good deal of protection. If you buy goods online, you still have the same rights as if you were shopping on the high street. Under the Distance Selling Regulations of 2000, you can cancel your order anytime from the moment you place your order up to seven working days from the day after you receive it. If you don't receive your goods at all, however, you are entitled to a full refund if the goods or services are not provided by the date you agreed. If you didn't agree a date, then you are entitled to a refund if the goods or services are not provided within 30 days.

In the event of dispute, if you buy by credit card you enjoy even more protection: under Section 75 of the Credit Card Consumer Protection Act, you'll usually receive full refund rights from £100 to £30,000 from your card provider if anything goes wrong. Even so, the onus is on the supplier to issue a refund.

Of course, none of this is any consolation if you actually want the goods you've ordered! To ensure they arrive, it's recommended to buy items to be posted three weeks in advance and wherever possible to go for the "click and collect" option to pick up from a high street store instead.

The October tax return

The October 31 deadline for paper tax returns could prove particularly frightening this year. Even if you've sent paperwork to HMRC in good time, the industrial action could result in your return getting snarled up with millions of other items of post, meaning it will miss the deadline and a probable £100 fine, as HMRC has yet to confirm any extensions.  

There are several options open to you. If you don't want to take any chances, you can still register to file online, meaning you have until 31 January 2010 to submit it. Alternatively, you can deliver your return and any relevant paperwork by hand at your local tax office; be sure to get a written acknowledgement. If you deliver your tax return by hand on Monday 2 November, normal arrangements will apply and you won't have to pay a late filing penalty.

Got a specific question about the postal strike? Head over to Q&A and ask other lovemoney.com readers for help!

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