EXCLUSIVE: Post Office increases banking remuneration by 20%

The Post Office (PO) has increased remuneration to postmasters for banking deposit transactions by 20%, as part of a wider package.

Taking effect from April, the changes equates to a £26m uplift for the 2023/24 financial year. Postmasters were informed in an email today by group chief retail officer, Martin Roberts. As part of the package, they will also see the doubling of payout transaction remuneration confirmed to stay at increased levels; 12.87% increase in mailwork payments; and a 9.5% increase in outreach remuneration.

“We recognise that postmasters are facing a tough trading environment, with inflation, business rates and energy prices all adding to the economic challenges,” said Roberts.

“We’ve listed to postmasters who tell us that the bank branch closures mean they are the only location where consumers and businesses can do their banking, which is why we’re increasing banking deposit remuneration by 20%. Alongside this, as a result of the deal we agreed with Royal Mail last year, postmasters will also benefit from Royal Mail tariff increases.

“Our aim has always been to introduce additional remuneration where its most needed and where its most impactful. Banking deposits is an obvious choice – growth in this area remains strong and increasing remuneration on banking deposits is regularly requested by postmasters and partners.”

The move builds upon the previous doubling of the transaction rate for deposits announced last August.

The National Federation of SubPostmasters (NFSP) has stated that whilst the increase per transaction “is a step in the right direction”, it is not enough in light of staff cost and inflation increases.

In a statement, on 1 April, the NFSP said: “This decision was not negotiated with the NFSP. We were only notified of this decision the day before the changes were implemented.

“This is disappointing as it meant the NFSP could not speak with postmasters to gain their views, before having a dialogue with PO about how much this would benefit our members. How can PO possibly reset its relationship with postmasters by imposing remuneration without negotiation with the NFSP?”

A Post Office spokesperson said: “We’ve listened to Postmasters who tell us that growth in banking transactions remains strong and so we’ve acted to increase banking deposit remuneration by 20% to reflect this, building on the previous doubling of the per transaction rate for banking deposits and as part of a wider £26 million package of remuneration improvements.

“Where banks are closing, our Area Managers are supporting Postmasters with customer acquisition, with dedicated marketing materials or with stands at the closing bank branch so Postmasters can meet the bank’s customers face-to-face. This is driving footfall and presents Postmasters with opportunities to increase retail transactions and support basket spend.”

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