6.3. Emerging as the backbone of the United Kingdom’s cash and banking infrastructure
Post Office provides cash and banking services for customers of a number of high-street banks, allowing them to withdraw and deposit cash, deposit cheques and check their current account balance at Post Office. Separately, customers can also pay a variety of bills at Post Office, including utility bills, social housing rent, council tax and parking permits. As documented in further detail in Section 3.3, the number of high-street banks has declined substantially in the United Kingdom, which brings greater importance to these services offered at Post Office branches and highlights the importance of Post Office as a core component of the United Kingdom’s banking infrastructure.
Both cash and banking services and the ability to pay bills at a post office are important for consumers (identified by 38% and 23% of respondents respectively). The overall importance of these services was also reflected in consumers’ valuations, as respondents would be willing to pay £2.09 per household per month to keep the ability to pay bills at post offices, while they would be willing to pay £1.64 to keep cash and banking services at post offices. While these figures may appear low, this is driven by the fact that certain groups find these services essential, while others do not yet have a strong need for them. In fact, the ability to pay bills and cash and banking services was found to be particularly important for those in social grades C2DE27 and for vulnerable consumers, who are likely to find Post Office’s services essential for day-to-day life:
- Those in social grade C2DE placed a greater value on both the ability to pay bills and cash and banking services than those in social grade ABC1. The difference between those in social grade C2DE and ABC1 was particularly stark for cash and banking services, with C2DE respondents valuing this service three times as much as ABC1 respondents. As with vulnerable consumers, those in social grade C2DE tend to have lower incomes, so the difference between these groups is even greater when considering willingness to pay as a share of household income.
- Vulnerable consumers also placed a greater value on both services than non-vulnerable consumers (including having double the valuation for cash and banking services). Vulnerable consumers were also more likely to find the provision of both services at a Post Office important compared to non-vulnerable consumers, with a difference of eight percentage points for cash and banking services between the groups (42% compared to 34%) and 11 percentage points for paying bills (29% compared to 18%). Lastly, vulnerable consumers are more likely to use these services at a post office: 33% of vulnerable consumers use cash and banking services at a post office more than once a year (compared to 26% of non-vulnerable consumers) and 19% use a post office to pay bills (compared to 6% of non-vulnerable consumers).
A separate YouGov survey conducted in 2021 on behalf of Post Office found that 15% of individuals depend on their local Post Office branch for cash and banking services. These services were more important to those earning less than £20,000 (23%) and those individuals aged 55 and above (20%). Access to cash is also more important to these groups – whilst 38% of all consumers would feel excluded without cash, this increases to 47% of those aged 55+ and to 46% for those with lower household incomes.
Similarly, a third of consumers would be less likely to shop in their local community without cash, but this increases to 38% of older people and 39% of those on lower incomes. Access to cash and basic banking services is important for a substantial proportion of the population, but particularly those groups that are often more excluded or at risk of vulnerability. Inadequate access to cash for these groups will not only negatively impact the individuals themselves, but also have a knock-on effect for local businesses by discouraging spending in the community.