THE Post Office is to launch a current account in a move which will make it one of the biggest financial services providers on the high street.
The account will launch in a small number of Post Office branches before a wider roll-out planned for 2014. It is expected that the product – which promises “simplicity, transparency and good value for money” – will eventually be available across the entire Post Office network.
The announcement comes a year after a report by Consumer Focus claimed that post offices had the potential to become “neighbourhood banks” – particularly for people living in rural areas, at a time when banks were closing across the country.
The Post Office has 11,500 branches UK-wide – more than all of the high street banks combined – and claims that 99.7 per cent of people live within three miles of one of its sites.
Experts said the launch could help boost competition in the banking market, which has seen a number of new entrants in recent years, including M&S Money, which launched a current account last year.
The new product will be launched under an agreement with the Bank of Ireland – which also partners the Post Office’s other products including savings accounts, mortgages, motor, home and life insurance, credit cards and a network of ATM
Kevin Mountford, head of banking at MoneySupermarket, said: “The launch of the Post Office’s new current account is big news for consumers. The fact that the Post Office is a popular trusted brand, already has a large savings account portfolio, and has over 11,500 branches means it can be a serious challenger in the current account market.”
He added: “The Post Office current account should have mass-market appeal due to its large customer base and ease of access, so I expect this account will be very popular.”
Rachel Springall, of financial information website Moneyfacts, added: “The Post Office has a good high street presence, perfect for people who prefer the more personal branch banking.”
The Post Office boasts almost three million customers for its financial services products and has a savings book of £17bn.
Nick Kennett, director of financial services at the Post Office, said: “This is very exciting news and we are absolutely delighted to announce that we are going to launch a current account. The Post Office is undertaking a significant transformation, providing more and more essential services to our customers. The introduction of the current account is a further statement of this ambition.”
The news will come as a boost to many post offices in Scotland, which have been diversifying from simply handling mail to offering other services.
In 2011, finance secretary John Swinney offered £1 million of grants to help post offices diversify their businesses.