THE Government last night urged pensioners and jobseekers not to panic as it launched a scheme to pay benefits electronically.

From yesterday, some state benefits will only be paid directly into banks, and within two years, the Government plans to pay all benefits electronically.

The move has concerned some people, who want to carry on using benefit books.

But the Government hopes the system will reduce the £80m of benefit fraud across the UK each year.

Gingerbread North-East, a charitable group that supports lone parents, said people have not had enough information on the scheme.

Help the Aged said older people felt bullied and confused, and expressed concern that people may not be able to get hold of their benefits if they were unexpectedly taken ill.

A Government spokeswoman said: "We are writing to everyone in stages and no one needs to do anything until we have written to them."