Under the proposal, around 30 banks and building societies are being asked to pay the higher sum to maintain essential services for millions of customers who still depend on physical access to deposit and withdraw cash. A final agreement is expected in the autumn, providing additional funding that will be channelled into higher pay for sub-postmasters, following a pledge made by Post Office chairman Nigel Railton last November.
The rising cost for the banks reflects the continuing importance of the Post Office’s 11,500-strong network, particularly as traditional high street lenders have closed more than 6,000 branches over the past decade. Figures from 2023 show that more than £10 billion was withdrawn and £29 billion was deposited at Post Office counters.
Although the Post Office continues to rely on public subsidies, the organisation’s leadership hopes to use this new deal to underpin its long-term commercial sustainability. The push to secure extra income comes in the wake of the Horizon IT scandal, which saw hundreds of sub-postmasters wrongly convicted due to flawed software. The Post Office has acknowledged that re-establishing trust and financial support for these branch operators remains crucial.
A spokeswoman for the Post Office declined to comment on ongoing negotiations, but confirmed the importance of maintaining access to cash for communities across the UK, describing the service as especially vital for vulnerable or less digitally connected customers.
Jamie Young
Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the 'covid era' and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine's coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk
