Postal Service Expands Agreement with Banks and Financial Institutions, Allowing Cash Services to Continue Through 2030
The Post Office Pledges Continued Cash Services for Another Five Years
Embrace the new era as Neil Brocklehurst steps into the CEO role, as the Post Office locks in a fresh five-year banking deal with banks and building societies. Starting in January 2026, this partnership will keep cash and banking services accessible to millions of customers and small businesses right up until December 2030.
MPs sound the alarm, warning that future government intervention may be essential to ensure cash acceptance for those who depend on it. Today, the Treasury Committee released a report which highlights the government's lack of action on access to cash and the potential for a two-tier society to develop.
This report reveals that the vulnerable are paying hefty premiums on essential goods and services as the number of places that accept cash dwindles. Half of the population still relies on cash for weekly expenses, according to research from the Post Office. A staggering 90% of adults consider maintaining access to cash in the UK to be fundamental.
In light of the reliance on the Post Office, patrons have been flocking to their branches as bank branches continue to shutter across the nation since 2020. Over 760 million transactions have been carried out in Post Office branches across the UK during this period.
First established in 2017, the partnership between banks, building societies, and the Post Office, known as 'The Banking Framework', was extended for an additional three years in 2022. The new deal allows customers of 30 banks and building societies to use their local Post Office for cash withdrawals, deposits, balance inquiries, and cheque deposits.
The Post Office's extensive network of branches is further bolstered by the 150 Banking Hubs in partnership with Cash Access UK. The 150th Banking Hub recently opened its doors in Treorchy, Wales, and serves as a lifeline for local high streets by providing banking services when their local bank branch closes.
Small businesses, in particular, find a nearby Post Office branch to be indispensable for daily cash deposits. The new banking deal will also boost post masters through increased compensation for handling cash transactions.
Despite the Post Office's commitment to cash services, it's essential to address the broader long-term concern of inadequate legislative protection. As the Post Office deal only extends access until 2030, finding a legislative solution for ensuring continued access to cash services beyond this timeframe remains crucial.
With Mr. Brocklehurst at the helm, the Post Office aims to ensure that its branches continue to serve as vital hubs for cash access. He comments, "This new, five-year agreement with banks and building societies ensures our branches remain vital hubs for cash access and provides certainty for businesses and individuals nationwide when it comes to their everyday banking."
Insights:- The £1.75bn agreement provides £350m annually to the Post Office, up from £250m/year in the previous deal.- Customers of 30 banks and building societies can access various services at 11,500 Post Office branches.- Annual cash deposits surpassed £29bn in 2023, making Post Office branches a lifeline for small businesses needing daily cash deposits.- Current safeguards under the Financial Services and Markets Act only require banks to assess cash access impacts before closures. However, there's no legislation mandating cash acceptance.
- Neil Brocklehurst, the new CEO, is leading the Post Office in a new era, securing a fresh five-year banking deal with banks and building societies starting in 2026.
- The Treasury Committee's report in 2022 highlighted the government's lack of action on access to cash and the potential for a two-tier society, with vulnerable populations paying high premiums for essential goods and services.
- As bank branches across the nation continue to close since 2020, patrons have been flocking to Post Office branches, with over 760 million transactions carried out during this period.
- In 2022, the Banking Framework partnership between banks, building societies, and the Post Office was extended for an additional three years, allowing customers of 30 banks and building societies to use their local Post Office for various services.
- Despite the Post Office's pledge to continue cash services until 2030, it's crucial to address the long-term concern of inadequate legislative protection to ensure continued access to cash services beyond this timeframe.
