Post Office to offer better financial services

Post Office financial improvements

The Post Office has suffered cut backs in the last decade, but encouraging news has indicated that the UK government has plans to increase the post offices financial services.

The new fund was highlighted by Business Secretary Lord Mandelson, who earmarked GBP180 million for the expansion.

"Since the global banking crisis we have set about reinventing the financial services industry piece-by-piece, building a system that is fairer, trusted and more responsible," said Mandelson. "Today is the next step in that process. The Post Office is a well-loved community institution and this move will bring more banking services back to the heart of those communities."

Post Office financial plans

The government initiative will introduce an accessible current account at any Post Office in the country, along with a children's account.

The idea is to make banking more accessible to many, and with this in mind, the government has been in talks with banks RBS and Santander about giving Post Office customers access to their current accounts. Santander has already agreed to allow business account holders to go through the network.

The move is designed to help people on low incomes better manage their money, and as a result the post office will introduce a "weekly budgeting account." This will also enable low earners to take advantage of available discounts by paying utility bills with direct debit.

"Paying bills by direct debit often means a discount on bills of nearly GBP£100 a year. This new account will mean some of the consumers who have to pay higher fuel bills can benefit from that discount and manage their energy bills better," said Ed Miliband, energy secretary.

Post office saving and mortgage

In addition, the Post Office will also offer a new mortgage product with a 90 percent loan-to-value ratio aimed at first-time buyers.

A 'Saving Gateway' account is also in the offing for people of working age who are on lower incomes which aims to kick-start the savings habit, with government adding 50p for every GBP£1 saved.

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