RURAL retailers have criticised a decision which means Premium Bonds will no longer be sold in Post Offices.

The Rural Shops Alliance said the decision was yet another example of government services ceasing to be accessible over-the-counter through Post Offices.

Changing demand from savers means Premium Bonds will only be available through the National Savings & Investments (NS&I) website, by phone or by post from 31 July.

The Rural Shops Alliance said the writing has been on the wall for a while – already savers were unable to cash in bonds or make any administrative changes at a Post Office.

"At one level, the logic is obvious, insofar as online or phone transactions are clearly cheaper to carry out than ones conducted face-to-face," said the alliance.

"However, there are two reasons why this move is wrong."

First, not everyone was able or willing to conduct all of their interactions with government departments remotely, said the alliance.

"An inclusive society should be prepared to provide alternative ways to ensure that nobody is disadvantaged by this approach."

This should mean providing an alternative face-to-face service, it added.

Secondly, the alliance said the decision was a "classic example of different government departments pulling in different directions".

The Post Office is 100% owned by the government and is in the middle of a massive programme to improve its retail branches, costing nearly £2bn.

While the Department for Business was funding the £2bn programme to support the Post Office Network, the NS&I was "working in totally the opposite direction, undermining its viability".

The alliance said it was asking BIS ministers to persuade other ministries to make full use of the asset their department was funding in the reinvented Post Office branch network.

It added: "If Post Offices do not have the products to offer customers, what is the point of having expensively refitted premises from which to do it?"

The NS&I said the majority of Premium Bond customers already conducted their business direct via 24 hour call centres, online through nsandi.com, by post or by electronic transfer.

It said: "This change reflects NS&I's commitment to serving its customers directly, and to operating as cost effectively as possible, in order to deliver significant savings to the taxpayer."