Government unveils its plans for Post Office bank

Published on Wednesday 2 December 2009 20:35

THE government revealed further details yesterday for a Post Office bank that would make it a "leading player in financial services".

It said that the bank would offer mortgages alongside a range of other financial products. There will now be a public consultation on the plans, which include offering access to accounts from every one of the PO's 11,500 branches. It has more branches than all the high street banks combined.

Making the government's vision for the PO bank a reality will include investment of up to 1.7 billion by 2011. Business Secretary Lord Mandelson said: "The Post Office is a great British institution that has been part of our economic and social fabric for well over 300 years."

He added that growing financial services at the PO will help to secure the future of the network and give people access to a full range of banking products at an institution they trust and value.

The government plans include: children's savings accounts; business accounts; budgeting accounts that ring-fence a proportion of income each week to pay bills, and closer links with credit unions. Leaflets containing further information about the plans and offering customers the chance to provide feedback will be available in all branches of the PO over the next 12 weeks.

The government hopes to begin rolling out the new services over the following year.

However, some commentators warn that the plans could create more clogging in the already busy PO system.

The government proposals do not include any reference to the Bank of Ireland, which currently provides the majority of the Post Office's financial services.