Postmasters are to see a £20m boost to pay packets in December, postal affairs minister Gareth Thomas has announced.

Sean Hudson, Communication Workers Union (CWU) branch secretary, said the amount will be equal to 66.6% of each branch’s November remuneration across variable income, as well as fixed elements such as assigned office payments and remote support payments.

Both independent postmasters and PO’s retail partners that operate branches on its behalf will receive the top-up payment ahead of Christmas. The top-up payment will be based on both the standard fixed and variable remuneration the branch received in November.

Neil Brocklehurst, PO acting CEO, said payments are being “fast-tracked” to postmasters “in recognition of the challenging trading conditions they are currently experiencing”.

“Our customers want services in the run-up to Christmas that are convenient and in-person, and that’s what our postmasters and retail partners offer,” he added. “We want our postmasters to focus on what they do best, serving their communities, and not to be worried about making ends meet.”

Thomas said the government is “committed to strengthening the Post Office”, and making sure postmasters receive the income “they deserve for the vital services they provide” for communities.

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“That’s why we are providing a further £37.5m of network subsidy this financial year which is essential to stabilise the organisation,” he said. “I welcome the Post Office’s one-off payment this month to postmasters, which will go a long way in easing the burden they face ahead of Christmas.”

Postmasters’ pay increase is coming at the right time

Calum Greenhow, chief executive for the National Federation of SubPostmasters (NFSP), said the figure is “well timed” and “very much required”.

He continued: “The NFSP has long campaigned for a significant increase in postmasters’ remuneration to reflect the value of the vital public services that postmasters deliver to communities.

“We know that right now many of our postmasters are struggling and are very worried about their ability to pay bills and provide for their families.

“We look forward to working with the government and Post Office to deliver a further £100m uplift in annual remuneration by March 2026.”

Hudson added that if any branch has had a change in postmaster during the month, this payment will be pro-rated between the outgoing and incoming postmasters according to the number of days of service during the month.

In addition, for any branch that had at least one full day of closure during November trading (of which Branch Support Centre have been informed) there will be an adjustment made to accommodate that closure unless it has already been covered by a goodwill payment.

Separately, and subject to government funding, the PO’s Transformation Plan will aim to add £250m annually to total postmaster remuneration by 2030, dramatically increasing postmasters’ share of revenues.

Postmasters can expect up to £120m in additional remuneration by the end of the first year of the plan, representing a 30% increase in revenue share. The ambition is to double average annual branch remuneration by 2030.

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