Dumfries and Galloway MP Russell Brown has welcomed the news that the Post Office is to offer current accounts in the UK, following a recent reporyt by the Office of Fair Trading that there is too little banking choice for consumers.
The Office of Fair Trading (OFT) said that Lloyds, RBS, Barclays and HSBC held 75% of the market which had led to a “lack of dynamism” from the banks, and a lack of choice for consumers.
The new Post Office current account will be available in some areas in the coming weeks before a wider launch next year, which will result in the account being available at the 11,500 post offices across the UK.
Russell Brown believes the new account will not only boost services available at Post Offices, helping to secure their future, but will be crucial in light of Welfare Reform proposals that will mean benefits will be paid directly into bank accounts.
At present many people on benefits cash their giro benefit payments at their local Post Office rather than have them paid into a bank account. When almost all benefits are paid into bank accounts, Russell Brown feared that Post Offices would lose business as benefit recipients collected their benefits from banks instead.
Another Welfare Reform change will mean that Housing Benefit will no longer be paid direct to landlords and instead be paid to the benefit recipient. The benefit recipient will then need to make arrangements to pay the landlord, often through direct debit or a standing order. At present Post Office bank accounts do not have direct debit or standing order facilities, but it is hoped this will change with the introduction of the new Post Office Current Account.
Russell Brown MP, who is the Chairman of the House of Commons All Party Parliamentary Committee on Post Offices said, “I very much welcome this move, which will be crucial to the future of our local Post Offices. There was a real fear that when basically all benefits are paid into banks accounts, people who currently cash giros at the Post Offices will no longer use their local Post Offices. However, the good news is that people will not only be able to continue to collect their benefits at the Post Office through a bank account but be able to carry out banking, including paying bills from a Post Office current account by direct debit and standing order. Many small towns and villages across Dumfries and Galloway don’t have banks, but they do have post offices so people will be able to use them for day to day banking. Hopefully, this will boost business for local Post offices, as sadly we have seen far too man close in recent years.”