The Post Office is pushing for a significant increase in the fees banks pay to allow their customers to use their national branch network, in the hope of securing between £350m and £400m a year from the next banking framework – up from the current £250m.
Under the proposal, around 30 banks and building societies would be required to pay the higher amount to maintain essential services for millions of customers who still rely on physical access to deposit and withdraw cash. A final agreement is expected in the autumn, providing additional funding that will be directed towards higher wages for sub-postmasters, following a pledge made by Chief Postmaster Nigel Railton last November.
The rising cost to banks reflects the continuing importance of the Post Office’s 11,500 strong network, especially as major traditional lenders have closed more than 6,000 branches over the past decade. Figures for 2023 show that more than £10 billion was withdrawn and £29 billion was deposited at post offices.
Although the Post Office still relies on public subsidies, the organization’s leadership hopes to use this new deal to support its long-term business sustainability. These efforts to secure additional income come in the wake of the Horizon IT scandal, which saw hundreds of sub-postmasters wrongly convicted over faulty software. The Post Office has acknowledged that rebuilding trust and financial support for these branch operators remains crucial.
A Post Office spokeswoman declined to comment on ongoing negotiations, but stressed the importance of maintaining access to cash for communities across the UK, describing the service as particularly vital for vulnerable or less digitally connected customers.
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