UK Government

Department for Business, Innovation and Skills: Great British Institution to Expand Financial Services Offer

Press Release   •   Dec 02, 2009 11:55 GMT

The Business Secretary Lord Mandelson today opened a public consultation on new financial products and services that could be offered by the Post Office.

Lord Mandelson said:

“The Post Office is a great British institution that has been part of our economic and social fabric for well over three hundred years.

“Growing financial services at the Post Office will help secure the future of the network and give people access to a full range of banking products at an institution they trust and value.

“At a time when some banks and financial services companies are seeking to reduce face to face contact with customers, the Post Office stands out. It offers a trusted brand, and has more branches than the high street banks combined. It is ideally placed to bring banking services back to the heart of people’s communities.”

The consultation outlines a number of financial services that the Post Office could offer, including:

  • Post Office Current Account – its own current account accessible from any of the over 11,500 branches across the country.
  • Post Office Children’s Savings Account – an account designed to encourage children to save through visits to their local Post Office.
  • Post Office Business Bank Accounts – currently the Post Office offers access to business accounts from a few High Street banks. It could offer increased access to business accounts from other providers, as well as its own business account.
  • A weekly budgeting account – many low income households are unable to take advantage of the savings that can be made by paying for services by direct debit. One way to tackle this problem is by offering a simple account that could ring-fence a proportion of income each week, and then pay out bills by direct debit on a monthly or quarterly basis.
  • A closer link between the Post Office and credit unions – it can be difficult to access credit union accounts when people are not in their local area. The local nature of the Post Office makes it ideally placed to allow credit union savers to access their accounts across the country.
  • Working to ensure all banks’ current accounts can be accessed at a Post Office – currently 60% of current accounts (around 25m accounts) can be accessed at Post Office branches. The Government wants more banks to allow their current accounts to be accessible at the Post Office.

The Government is also keen for the Post Office to be a more significant player in the mortgage market.

Lord Mandelson said:

“I would like to see the Post Office at the forefront of the provision of good value mortgages across the UK. The Post Office has rapidly grown sales of its award-winning mortgages and is today announcing improved rates across its mortgages range.

“Our consultation outlines exciting proposals, but I want people to have their say. This is an opportunity for local communities to tell us what they want and need from their Post Office. Information about the consultation will be available in all of the network’s 11,500 branches.”

The Post Office is one of the UK’s fastest growing financial services providers, and the country’s number one foreign currency provider. This consultation is the next step towards turning the Post Office into a leading player in financial services, offering banking products across its network of over 11,500 branches.

The consultation reinforces the Government’s commitment to a secure and sustainable future for the Post Office, following the decision in November 2008 to award it a new contract for the Post Office Card Account, and the investment of up to £1.7bn to 2011.

Notes to editors

  • On 29 September the Prime Minister announced that he wanted a much bigger role for Post Office in providing financial services, to increase the accessibility of reliable financial products for consumers and small businesses. The Prime Minister said: “I want the Post Office to play a much bigger role, bringing banking services back to the heart of people’s communities.”
  • The Government has committed up to £1.7bn of funding to the Post Office, including £150m a year to help support a network of around 11,500 branches to 2011. It will continue to support the non-commercial network beyond this date.
  • With over 11,500 branches nationwide, the Post Office is the largest retail and financial services chain in the UK. Its network is larger than all of the banks in the UK combined.
  • Over 99 per cent of the UK population lives within three miles of a Post Office branch and over 23 million customers visit every week.
  • The Post Office already offers a range of financial services, including savings, insurance, lending, and foreign currency products
  • The consultation sets out the Government’s vision for Post Office Banking and proposes new products which could be delivered through the Post Office. It also describes the existing range of financial products available at Post Offices.
  • The consultation will be available from www.bis.gov.uk/postofficebanking. Hard copies (including alternative formats) are available on request. Leaflets giving an overview of the consultation and information about how to respond will be available in all Post Offices.
  • Contacts

    NDS Enquiries
    Phone: For enquiries please contact the above department
    ndsenquiries@coi.gsi.gov.uk