Post Office card account renewed until 2021
The previous contract between the government and the Post Office had been due to expire in March 2015, but crisis has been averted and now been extended to the new date in the future.
The card is a lifeline for those 2.5 million people - at least half of those being pensioners - who have no truck with banks
The account allows holders to get their cash out at the Post Office's 11,500 branches or 2,500 cash machines.
Pensions Minister Steve Webb welcomed the news, saying: "Although most people have a bank account, there are certain groups for whom this is not viable and, for them, the Post Office card account provides an important lifeline,"
He also threw in the bonus news of the contract costing 10% cheaper than previously, but the amount paid to subpostmasters per transaction remained the same.
George Thomson, general secretary of the National Federation of Subpostmasters, said: "The renewal of the Post Office Card Account will help provide the Post Office network with a more stable future."