The Post Office will see a "major expansion" to the financial services it offers after the Government announced plans to inject £180million of new funding to make its network of 11,500 branches more sustainable.
Unveiling the plans which will include new accounts, business services and mortgages, business secretary Lord Mandelson hoped the move would help create a system that is "fairer, trusted, and more responsible".
"The Post Office is a well-loved community institution and this move will bring more banking services back to the heart of those communities," he said.
Under the plans to expand the Post Office's banking services, consumers will soon be able to open their own Post Office Current Account, while a weekly budgeting account designed at helping people on low household incomes to manage their finances and save has also been proposed.
Ed Miliband, energy secretary says that this type of account will enable people to get discounts on their utility bills.
"Paying bills by direct debit often means a discount on bills of nearly £100 a year. This new account will mean some of the consumers who have to pay higher fuel bills can benefit from that discount and manage their energy bills better," he said.
Meanwhile, consumers will also be able to access current accounts from other providers with 'detailed negotiations' already taking place with RBS and Santander, which could potentially mean that 86 per cent of all current accounts would be accessible through the Post Office.
In addition, the Post Office is set to offer a new mortgage deal aimed at first time buyers offering 90 per cent LTV (loan-to-value), while also increasing its business services by allowing Santander business customers to access their accounts through any of its branches.
Commenting, Pat McFadden, business minister 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."
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