plus 1, Better banking for low income people - News Wales

Better banking for low income people - News Wales

Business Secretary Lord Mandelson today announced a major expansion of the financial services offered by the Post Office, in a drive to put banking back into the heart of communities and making the Post Office network of 11,500 branches more sustainable.

Lord Mandelson said: "The Post Office is a well-loved community institution and this move will bring more banking services back to the heart of those communities."

Business Minister Pat McFadden said: "The Post Office can provide a range of good value, simple financial products for everyone. These are the clear messages that people have given us and we are acting on them – a major step towards making the Post Office a sustainable neighbourhood banking service."

Measures announced include:

Weekly budgeting account - An account which would help people on low incomes manage their household budgets, save money by taking advantage of the discounts for using direct debit to pay their utility bills and which would be available through the Post Office. The Government is already working with the Post Office and utility companies to make this account a reality as quickly as possible.

Children's Savings Account - the Post Office will launch a Post Office Children's Savings Account in the next twelve months, encouraging children to save through visits to their local Post Office.

Post Office Current Account - the Post Office will launch its own current account that will be accessible from any Post Office in the country.

Access to accounts from other banks - detailed negotiations are taking place with RBS and Santander to give access to their current accounts - this would mean that around 86% of current accounts would be accessible at Post Offices.

Business services - a new agreement between the Post Office and Santander will allow all its business account holders to access their accounts at the Post Office. The Post Office will also explore the development of a Post Office business bank account, which would be available throughout the network. Additionally, following responses made to this consultation, the Post Office and the Regional Development Agencies will explore how they can best work together to serve small and medium enterprises in each region.

Mortgages - the Post Office will offer a new mortgage product with a 90% loan-to-value ratio aimed at first-time buyers. The Post Office will also increase its lending substantially, aiming to double the value of its mortgage book in the financial year 2010/11