The Post Office is to make its 73 branch-based mortgage advisers redundant as it attempts to wean itself off hundreds of millions of pounds a year of taxpayer subsidy and become self-sufficient.
The previously loss-making operator of 11,600 outlets said it would stop providing a personalised loans-advice service and instead appoint eight “customer relationship assistants” and two team leaders, who could be reached only online or on the phone.
The Post Office is the state-owned retail division of Royal Mail, which was left behind in the public sector when the nationwide letters and parcels delivery company was privatised in 2013.
The Post Office has begun receiving £370 million of taxpayer money to keep its head above water until 2021, on top of the £2 billion of funding from the government it has been given since 2010. However, it announced that it finished 2017 in the black, with a profit of £13 million, for the first time in 16 years.
Unions criticised the mortgage adviser move, saying it would make branches less “meaningful or relevant to the public”, who would see more branches close and be moved to “corner shops, off-licences and pharmacies, where the customer experience is poorer”.
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Brian Scott, Unite officer for the Post Office, said: “This is a clear demonstration of the slash-and-burn approach by the Post Office, which has no clear strategy or business plan for the future. It is another nail in the coffin in the public service remit customers expect.
“The management is moving to a plan where people will have to phone a call centre for advice. It is less than five years since top executives trumpeted that mortgages would be a profitable product in post offices.”
A Post Office spokeswoman said the move was in response to changing customer habits. “They want flexibility, and to speak to people when it suits them,” she said. “We are on our way to becoming a sustainable, successful business and this means continually reviewing our business to ensure our ways of working are as effective and customer focused as possible.
“This means we have had to make the difficult decision of moving away from providing the face-to-face advice which has until now been available in a limited number of our branches.”
M&S Bank announced yesterday that it would be offering mortgages for the first time, specialising in first-time buyers, including a product that will allow up to four flat-sharers to club together and take out a loan. New purchasers are also being offered £1,000 cashback as well as a free valuation.
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Rachel Springall, a personal finance expert with Moneyfacts, said prospective customers should not be blinded by offers of cashback.
“Borrowers will be wise to work out the true cost of any deal, particularly as there are lower rates available in the market, which include fee-free deals.
“As an example, Sainsbury’s Bank offers a two-year fixed mortgage priced at 1.69 per cent with no product fee and it offers a free valuation, plus remortgage customers get free legal fees.”