Post Office announces plans to launch current account

[TrueBlueTerrier]

http://www.guardian.co.uk/money/2013/ap ... ks-banking" onclick="window.open(this.href);return false;

Post Office has announced plans to re-enter the current account market with a new banking deal for consumers over the next few weeks. Details of the account are scant, but it is thought that the combination of a well-known brand and a large branch network could make it a serious challenger to the big four banks, particularly when new rules making it easier to switch accounts come into force later this year.

Nick Kennett, director of financial services at Post Office, said that research into the current account market had suggested customers primarily want "simplicity, transparency and good value for money".

He added: "With over 11,500 branches, which is more than all the UK banks combined, we can provide this through the most convenient and accessible retail network in the UK."

Post Office already offers a range of financial services including savings, credit cards and travel money, and recently introduced in-branch mortgage advice for consumers. Kennett said that the launch of a current account was part of the "significant transformation" of the brand.

The account will initially be launched in a small number of branches, before a wider-roll out next year.

Kevin Mountford, head of banking at comparison website MoneySupermarket, said the launch was "big news" for consumers. "The fact that the Post Office is a popular trusted brand, already has a large savings account portfolio, and has over 11,500 branches throughout the country means it can be a serious challenger in the current account market," he said.

Michael Ossei, personal finance expert at uSwitch.com, said the banks should see Post Office as "a serious threat", with those in rural areas especially likely to be attracted by its branch network.

However, Andrew Hagger, director of Moneycomms.co.uk, cautioned that more detail is needed, pointing out that the excitement surrounding Marks & Spencer's entrance to the market last year quickly subsided when it emerged the accounts had fees of up to £20 a month.

This is not the first foray into current account banking by Post Office, which was the home of the state-owned Girobank for two decades until its sale to Alliance & Leicester building society in 1990. At that point, it was the sixth-largest provider of current accounts in the UK. It comes at a time when competition in the market is heating up, with Tesco and Virgin Money known to be working on their own launches, and existing providers enhancing their deals to attract consumers

[baldrick]

Might be a good idea for places where there isn't a bank, but I wouldn't like to have to queue for 20 minutes or more as you have to in most of the POs around here.

[Lincox]

Amazing that they can be closing branches and yet launch a new product that will be unserviceable in many areas. Typical Post Office/Royal Mail forward thinking.

[RedBagMan]

"Employee incentives" perchance ??

[UnhappyGremlin]

"Employee incentives" perchance ??

Probably. But unlikely to be worthwhile. I've yet to find any product cheaper from the Post Office, or better interest rates etc.

[britwrit]

I just Googled a fascinating article about the old Girobank on Wikipedia (http://en.wikipedia.org/wiki/Girobank). Back in the day, banks didn't care about the working or middle classes and the post office became the first place where they could have a current account. At one time, about a quarter of all British savings was held by it.