Banking on it: How well are post offices delivering cash and banking services?

Banking on it: how well are post offices delivering cash and banking services? [ 460 kb]

Despite a huge increase in cashless spending and rising online banking, 14% of consumers and 20% of small businesses still use face to face banking weekly. As banks continue to exit the high street, post offices are key to maintaining access to banking services. 

This is the most comprehensive research ever looking at how well the Post Office is placed to provide this safety net for local communities. We interviewed 3,000 individuals and small businesses, surveyed 270 postmasters and 140 local Citizens Advice advisers, and carried out almost 1,000 banking transactions at 470 post offices.

We found consumer banking at post office counters has doubled in the past 3 years. 1 in 4 consumers and 1 in 5 small businesses have now used Post Office banking. 

For many people and businesses Post Office banking is often the only option left. Vulnerable groups use Post Office banking most frequently, particularly those on low incomes and disabled people. 

Overall service standards are largely good and the vast majority of banking transactions attempted at post offices are successfully completed. 

However we did uncover some significant problems, including: 

• The cheque deposit process is too complex. 1 in 4 shoppers were unable to pay in a cheque

• Staff don’t always provide the correct information. 56% gave the wrong information about withdrawal limits

• Services aren’t always available when they should be. This is a particular issue in Outreach post offices where services couldn’t be accessed in 1 in 5 visits

There are also structural risks to Post Office banking. 70% of postmasters told us pay rates for banking do not cover the cost of providing the service. 

We are living in rapidly changing times and people’s long-term needs for cash and banking services remain unclear. However, many people are expected to continue to need to use cash and face to face banking services well into the future. It’s crucial that the government protects the Post Office provision for as long as the service is required. 

To ensure Post Office banking is provided to an optimum standard, we recommend:

1. Post Office Ltd should make improvements to the service, including the cheque deposit process, privacy, queuing and staff training. Post Office Ltd also needs to ensure provision is reliable and available at advertised times, particularly in Outreach post offices.

2. Post Office Ltd and the banking industry should work together to
i) improve consumer and small business awareness of the full range of Post Office banking services
ii) ensure Post Office and postmasters’ remuneration for providing banking is provided at levels that can sustain the service