How often do you go into your local Post Office? As Britain's banks continue to close branches, you may be needing it more than you think, as somewhere to deposit money, take it out and check your bank balance. A Government decision last week, however, placed the future of many Post Office branches in jeopardy. The message seems clear – use your Post Office, or lose it and maybe your banking services as well. Sub-postmasters, who operate most of Britain's rural Post Offices, said the "bitterly disappointing decision" to remove the contract for processing benefit cheques from the Post Office and give it to PayPoint and Citibank could lead to closures across the 1,200-strong network.
"Sub-postmasters need significant volumes of work in order to survive, including regular repeat transactions such as benefits payments. Ministers have to deliver new government work to Post Offices, not more broken promises," said George Thomson, general secretary of the National Federation of Subpostmasters. "The combination of changes in technology and customer behaviour, falling income and rising running costs have left many sub-postmasters struggling to keep running their business for the benefit of their community.
"The Government must now deliver on its pledge and make better use of its own network by offering more government and financial services at post offices for the public to use, rather than withdrawing contracts. Otherwise, the downward spiral will continue for our post offices, further jeopardising the future both of individual branches and the entire national network."
Sub-postmasters are small businessmen and women, not Post Office employees, and if they don't get enough customers, they will sell. Post office closures represent a vast problem in areas where banks have already shut, increasingly leaving Post Offices as the only option for banking. According to Derek French, head of the Campaign for Community Banking Services, many banks are now closing the last bank in town, despite repeated pledges not to leave areas without services.
According to his figures, Barclays closed 22 banks last quarter, of which 12 were the last, or the last bank but one, in a town. In one case, the bank wrote to residents urging them to use the local Post Office, but this had already closed. HSBC closed nine branches, of which six were the last or last but one. Seven of the nine Lloyds branches that closed in the same period were the last one in a town.
"The pattern as to the type of place now being attacked is obvious," Mr French warned, saying banks were now cutting communities loose without banking services. "Post offices can be really important in those areas, although not everyone can bank with the Post Office."
It is estimated that about 60pc of current accounts can now be accessed through the Post Office, although most are with the state-backed banks, such as RBS and Lloyds Banking Group. The Government will look to extend the service to 80pc of all current accounts. The graphic shows which banks allow you to operate a current account through a Post Office branch.
The latest banks to come on board and offer customers Post Office access are Royal Bank of Scotland and NatWest. Customers will be able to use Post Office counters and computer screens to withdraw cash and check balances – and in some cases deposit cheques into accounts. However, those with an HSBC current account or Santander account (unless they hold accounts that were formerly with Alliance & Leicester) cannot use their Post Office – unless they have a basic bank account that does not offer overdraft facilities. Since the Government rejected calls for the Post Office to run its own bank, customers must rely on their own banks' relationship with Royal Mail in order to receive services.
The Government also pledged not to reduce the Post Office branch network, with Vince Cable, the Business Secretary, saying there would be "no closures on our watch".
But it has little control over whether sub-postmasters choose to close and whether others want to take their place. The decision to move benefit payments to a rival firm may hasten the departure of some sub-postmasters.
Martin Moran, the commercial director of the Post Office, said: "The Post Office is committed to providing free and easy access to bank accounts for the 20 million customers who visit branches every week. More than 60pc of UK debit card holders can service their accounts over the counter at branches and we are working towards a position where all UK current account holders can use the Post Office. With a network of almost 12,000 branches, larger than all the banks combined, we are in the unique position of offering customers unrivalled access to services."
A spokesman added that 151 million bill payments were made each year at Post Offices. ''We also offer a range of government services, including the Post Office Card Account, passport applications, driving licence applications, car tax and so on,"
he said.
The Post Office also sells financial products through its joint venture with Bank of Ireland. Some of these can be opened and run in Post Office branches. Others, such as its insurance and mortgage products, are applied for and run remotely, via telephone or the internet.
Savings accounts offered by the Post Office in conjunction with the Bank of Ireland are now covered by the Financial Services Compensation Scheme. This means that a maximum of £85,000 of a person's savings would be protected by the Government in the event of the Bank of Ireland or its UK-based subsidiary
going bust.
Despite all of this, and the vital role the Post Office plays in communities, the decision to pay benefits elsewhere suggests that the Government may not deliver on its promise to keep its local Post Offices as "the front office for government".
"If the Government is serious about maintaining a national network of Post Offices, it must ensure that all future tenders for government services take account of the full range of factors alongside cost," Mr Thomson said. "The Post Office provides guaranteed availability of cash through its comprehensive infrastructure, unrivalled local access and trained, trusted staff able to undertake specialist transactions in a safe, secure and professional environment."
As a banking service for those rapidly losing their branches, the Post Office is vital, but we can't bank on its survival, unless we bank with it now.
"The pattern as to the type of place now being attacked is obvious," Mr French warned, saying banks were now cutting communities loose without banking services. "Post offices can be really important in those areas, although not everyone can bank with the Post Office."
It is estimated that about 60pc of current accounts can now be accessed through the Post Office, although most are with the state-backed banks, such as RBS and Lloyds Banking Group. The Government will look to extend the service to 80pc of all current accounts. The graphic shows which banks allow you to operate a current account through a Post Office branch.
The latest banks to come on board and offer customers Post Office access are Royal Bank of Scotland and NatWest. Customers will be able to use Post Office counters and computer screens to withdraw cash and check balances – and in some cases deposit cheques into accounts. However, those with an HSBC current account or Santander account (unless they hold accounts that were formerly with Alliance & Leicester) cannot use their Post Office – unless they have a basic bank account that does not offer overdraft facilities. Since the Government rejected calls for the Post Office to run its own bank, customers must rely on their own banks' relationship with Royal Mail in order to receive services.
The Government also pledged not to reduce the Post Office branch network, with Vince Cable, the Business Secretary, saying there would be "no closures on our watch".
But it has little control over whether sub-postmasters choose to close and whether others want to take their place. The decision to move benefit payments to a rival firm may hasten the departure of some sub-postmasters.
Martin Moran, the commercial director of the Post Office, said: "The Post Office is committed to providing free and easy access to bank accounts for the 20 million customers who visit branches every week. More than 60pc of UK debit card holders can service their accounts over the counter at branches and we are working towards a position where all UK current account holders can use the Post Office. With a network of almost 12,000 branches, larger than all the banks combined, we are in the unique position of offering customers unrivalled access to services."
A spokesman added that 151 million bill payments were made each year at Post Offices. ''We also offer a range of government services, including the Post Office Card Account, passport applications, driving licence applications, car tax and so on,"
he said.
The Post Office also sells financial products through its joint venture with Bank of Ireland. Some of these can be opened and run in Post Office branches. Others, such as its insurance and mortgage products, are applied for and run remotely, via telephone or the internet.
Savings accounts offered by the Post Office in conjunction with the Bank of Ireland are now covered by the Financial Services Compensation Scheme. This means that a maximum of £85,000 of a person's savings would be protected by the Government in the event of the Bank of Ireland or its UK-based subsidiary
going bust.
Despite all of this, and the vital role the Post Office plays in communities, the decision to pay benefits elsewhere suggests that the Government may not deliver on its promise to keep its local Post Offices as "the front office for government".
"If the Government is serious about maintaining a national network of Post Offices, it must ensure that all future tenders for government services take account of the full range of factors alongside cost," Mr Thomson said. "The Post Office provides guaranteed availability of cash through its comprehensive infrastructure, unrivalled local access and trained, trusted staff able to undertake specialist transactions in a safe, secure and professional environment."
As a banking service for those rapidly losing their branches, the Post Office is vital, but we can't bank on its survival, unless we bank with it now.
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