Memorandum submitted by HM Treasury
GOVERNMENT SERVICES PROVIDED THROUGH THE
POST OFFICE
Thank you for your letter of 4 March. There
are two main Treasury services provided through post offices;
National Savings and Investments products (NS&I) and the forthcoming
Saving Gateway. The Treasury also has a lead interest in promoting
financial inclusion and widening access to basic bank accounts,
which are accessible through Post Offices. Of course the Treasury's
interest also extends across Government to the products being
procured through departments to ensure that all spending represents
good value for money.
NATIONAL SAVINGS
AND INVESTMENTS
NS&I do not have a branch network. Their
savings products reach the customer through two main channels:
direct (Internet, telephone, post): and indirect (through the
Post Office and WHSmith), The Post Office (POL) is their distribution
partner, with approximately 11,500 outlets providing a face-to-face
channel for their customers. It distributes nine savings products
for NS&I and for some of these it also provides service support.
The nine NS&I products available through
the Post Office are also available from NS&I direct, and indeed
NS&I has a further three savings products which are only available
by telephone, post and/or internet. The nine products available
through the Post Office network—as of 6 April 2009—are:
Premium Bonds, Fixed Interest Savings Certificates, Inflation
Beating Savings (otherwise known as index Linked Savings Certificates),
Children's Bonus Bonds, Guaranteed Growth Bonds, Guaranteed Income
Bonds, Investment Account, Easy Access Savings Account and Income
Bonds, Income Bonds are not available over the counter at Post
Office branches but postal application forms are provided.
The Post Office continues to develop its own-branded
financial service products and NS&I supports them in their
duty as distributor to ensure that customers have the information
to easily understand the differences between the two sets of products.
The Post Office is not regulated to give advice on its own or
NS&I's savings products—only information—and it
is important that this is given clearly and impartially. There
are no specific plans to change the NS&I range available through
the Post Office although any new NS&I product developments
are more likely to focus on directly accessed options.
SAVING GATEWAY
The Government was pleased to announce at the
2008 Pre-Budget Report that Saving Gateway accounts will
be available through the Post Office. The Saving Gateway will
be a cash saving scheme, which aims to promote saving and financial
inclusion for working age people on lower Incomes. It provides
a financial incentive to save through a Government contribution
of 50p for each pound saved into the scheme, up to a monthly limit.
Budget 2008 announced that the Saving Gateway
will be introduced nationally, with the first accounts available
to savers in 2010. The Saving Gateway Accounts Bill, which will
set in place the rules for the scheme, is currently before Parliament.
Individuals in receipt of qualifying benefits and
tax credits will be eligible to open an account—this gives
an eligible population of around eight million. As well as the
Post Office, accounts will be offered by financial institutions
such as banks, building societies and credit unions.
FINANCIAL INCLUSION:
BASIC BANK
ACCOUNTS
The Post Office currently serves financially
excluded people by providing withdrawal and deposit facilities
for basic bank account holders. The Post Office provides these
services through agency agreements with the banks. It also provides
the Post Office Card Account, which is the responsibility of the
Department for Work and Pensions.
Basic Bank Accounts are fully functioning transactional
bank accounts. They allow payments in from employers and others
as well as direct debit payments and ATM withdrawals. They do
not offer a cheque book or an overdraft, so an account holder
cannot get into debt.
The FSA publishes a guide to basic bank accounts,
which is regularly updated. This shows there are 17 basic
bank account products available. All these accounts offer cash
withdrawals at the Post Office. Most of these accounts also allow
payments into the account and a balance check at any Post Office
branch.
The Government will welcome any further proposals
from the Post Office to serve financially excluded people by offering
new products on a commercial basis.
OTHER SERVICES
Post Office also offers a number of tax and
benefit services, including car tax disc applications, a Child
Trust Fund and benefits through the Post Office Card Account.
HMRC and DWP respectively will be able to advise on these.
We welcome your Committee's work to review future
services that would be offered through the Post Office network.
The Treasury's interest is both to extend financialjnclusion while
also ensuring that all services procured across Government are
done in accordance with the principles set out in the Treasury
publication Managing Public Money to ensure that they achieve
good value for money.[1]
I hope this provides the information you need
and am happy to clarify any points.
2 April 2009
1 Managing Public Money can be found at http://www.hm-treasury.gov.uk/psr_mpm_index.htm Back
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