Post Office to offer big expansion of financial services

THE government will today announce a "major expansion" of financial services offered by the Post Office under moves aimed at making the 11,500-strong branch network more sustainable.

Launching the development, Business Secretary Lord Mandelson said the new measures, including new accounts and business services, had previously been likened to creating a Post Office Bank.

A coalition of groups including the Communication Workers Union, Federation of Small Businesses and National Pensioners Convention have been pressing ministers to support such a Post Office Bank.

Lord Mandelson said today's announcement will be a core part of Labour's election manifesto.

Ministers called it a "step change" in banking at the Post Office and demonstrated the government's ongoing commitment to the Post Office network.

They include a weekly budgeting account to help people on low incomes manage household budgets and save money by taking advantage of discounts for using direct debit to pay utility bills; a children's savings account to be launched in the next 12 months; and a Post Office Current Account, accessible from any post office.

Negotiations are also taking place with RBS and Santander to give access to their current accounts, meaning that 86 per cent of current accounts would be accessible at post offices.

A new agreement was also announced with Santander to allow all its business account holders to access their accounts at the Post Office.

The Post Office will also explore the development of a post office business bank account, which would be available throughout the network.

Other measures will include post offices offering a new mortgage product with a 90 per cent loan-to-value ratio aimed at first-time buyers, plus a Saving Gateway account for people of working age on lower incomes.