UK Post Office to lure banks customers
The Post Office is set to unveil a range of financial products in a direct challenge to banks, building societies and other providers.
Post Office bosses are convinced they will be able to poach millions of disillusioned banking customers because of the easy availability of branches – it has more than 17,000 outlets.
This week, the Post Office will introduce an unsecured personal loan which will be followed by a range of core products including mortgages, credit cards and life and home insurance.
“We are looking at doing the lot, ” said a spokeswoman. “The banks and other high street providers have had it their own way far too long and we intend to give consumers good-value financial products which are easily accessible.
“While the banks are closing branches and turning customers away, the Post Office will focus on expanding its service.”
The launch reflects increasing customer anxiety about bank services. Last week, Your Money reported HSBC had banned rival banks’ customers from using some of its branches at busy times.
In contrast, the Post Office has agreements with 17 banks and building societies that enable their customers to withdraw money at Post Office branches without charge. These include Abbey National, Alliance & Leicester, Bank of Scotland, Barclays, Co-operative Bank, Halifax, HSBC, Lloyds TSB, Nationwide Building Society and Royal Bank of Scotland.
The Post Office is also at the centre of the Government’s plan to shift millions of recipients of State benefits, including the Basic State Pension, to electronic payments. By 2005, most benefits payments will no longer be paid in cash over the counter.
The Post Office recently launched a basic bank account into which benefits could be paid, which rivals similar products from banks and building societies. It also offers a cashcard for easy withdrawals.
“The account won’t allow customers to overdraw or incur any charges, ” said the spokeswoman.
“And cash withdrawals can be made free of charge over the counter with a Post Office account card and Pin number.”
About 94% of the UK population live within a mile of a Post Office branch.
But while 60% of villages have a branch, just 9% have a bank after a spate of branch closures in recent years.
