Britons are turning to the Post Office to get their hands on their cash, as bank branches continue to be shuttered across the country.
Consumers withdrew £836.21million in cash from Post Offices in June, up 12.5 per cent in a year, the postal giant said this week.
Britons are able to do basic banking at Post Offices, under an agreement to offset the impact of banks closing 5,632 branches since 2015.
The agreement sees banks pay the Post Office to provide a basic banking service.
Martin Kearsley, Post Office banking director, said: ‘These figures clearly show that Britain is anything but a cashless society and people are reliant on cash as the tried and tested way to manage a budget.’
Shut up shop: Thousands of bank and building society branches have closed
However Post Offices are not banks, and so only allow a maximum of four banking services: paying money in, taking cash out, paying cheques in and checking bank balances.
For everything else, customers need to visit a bank branch. This includes money transfers, opening accounts or linked savings deals, printing out bank statements and sorting out customer service issues that cannot be fixed with online banking.
Some banks do not even offer all four of the limited Post Office banking options to their customers.
For example, Nationwide customers cannot deposit cash or pay in cheques at a Post Office branch, while Metro and M&S Bank customers cannot use Post Office banking at all.
Members of smaller banks Starling Bank, Adam & Co and Handlesbanken are not allowed to pay in cheques, while customers of Optimum Bank and Quidity can only pay in cash.
Andrew Hagger, founder of personal finance website Moneycomms, said the impact of the trend for more Post Office banking was offset by falling standards when visiting a bank branch.
‘The services you get in a bank branch are quite different to what they were five to 10 years ago,’ Hagger said. ‘If you go into a branch you are often referred to a machine anyway. The Post Office is an extension [of using a bank branch] but it is pretty average. It all depends on what you need – if you just need to get some cash out, or similar, the Post Office is fine.’
A Nationwide spokesperson said: ‘Demand from our customers for other services via the Post Office remains low – the Society doesn’t offer business banking where demand for paying in cash or cheques is higher.
‘Unlike many other providers, we are continuing to invest in branches as we know customers value face to face banking. Only recently, we renewed our branch promise to not leave any town or city in which it is based until at least 2026. As such, the majority of our customers will pay money in or deposit cheques via their local branch.’
A Metro Bank spokesperson said: ‘It’s important to note that many high street banks are turning to the Post Office to fill gaps left by closing branches. Metro Bank is committed to its store network and has plans to open 11 more stores in the north of England by 2025.’
