Government unveils financial plans for the Post Office

| December 2, 2009 | 0 Comments

The Government has outlined plans for the Post Office to become a ‘people’s bank’ by offering financial products.

The proposals, led by Business Secretary Lord Peter Mandelson, will create a ‘People’s Bank’, which will see Post Office outlets as the backbone of a new national bank.

According to the Government, the plans will turn the Post Office into “a leading player in financial services” and will require an investment of £1.7 billion by 2011.

It will also see the Post Office provide mortgages, children’s savings accounts and business accounts.

However, the Post Office currently offers a range of banking services and bill payments after it embarked on a joint venture with the Bank of Ireland in 2004 which then allowed it to provide mortgages, loans and credit cards.

There will now be a public consultation on the plans, which include offering access to accounts from each one of the UK’s 11,500 branches. Information on the consultation will be available in all branches of the Post Office.

“The Post Office is a great British institution that has been part of our economic and social fabric for well over 300 years,” said Business Secretary Lord Mandelson.

“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,” added Lord Mandelson.

Ministers hope the moves to expand the Post Office will prevent further post office closures and see an end to plans of part-privatisation of Royal Mail, the parent company of Post Office Ltd.

The plans were welcomed by consumer group, Consumer Focus, who said: “A greater role in financial services for post offices would benefit all post office users, but could particularly help low-income customers, small businesses, and those is rural and deprived urban areas where there are fewer banks.

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