🔔 Labour proposes the use of the Post Office network to create a national bank

The Labour Shadow Chancellor, John McDonnell has proposed launching a publicly-owned bank using the Post Office network, to provide long-term support to communities amid the backdrop of high street bank branch closures.

For many, the rapid loss of so many bank branches has been dreadful, with two-thirds fewer branches than there were 30 years ago, according to Which?.

That said, many people now use online banking, so the need for so many bank branches has presumably dwindled – putting the banks in a difficult situation. Do the right thing by better supporting all customers or make more profit for shareholders who will ultimately help to fund ongoing development?

National Savings & Investments (NS&I) was set up back in 1861 when the then Chancellor of the Exchequer, William Gladstone, liked and piloted the scheme into law with the idea of having a savings bank no more than an hour’s walk from every working man’s fireside – to help them save for their future.

That was and continues to be a hugely successful savings network and, in the past, NS&I used the Post Office for branch distribution – but that has now disappeared too – once again online-only and telephone and post being the more efficient channels for distribution, keeping the cost of manning and running high street branches to a minimum.

The idea to bring local banking back to the high street and provide face-to-face facilities again for those who need it, in particular the vulnerable, is an excellent idea.

However, whether this could realistically come to fruition remains to be seen.

In the meantime, the good news is that there are providers who do still vow to support their customers by maintaining a branch presence – Nationwide Building Society for example.

With regard to savings accounts, although many of the best rates are online only, there are other options for those who would prefer to open and manage their savings accounts in a more traditional way.

For example, the best easy access accounts paying up to 1.50% gross/AER are online only.

However, Sainsbury’s bank allows telephone applications and access on its Defined Access Saver Issue 8 (1.45% gross/AER) and Kent Reliance’s easy access account – issue 32 can be opened in branch and by post, as well as online and it pays a competitive 1.40% gross/AER.

For more information, our best buy tables always include at least one account that does not need to be opened online. You can also call us on 0800 011 9705.

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