Post Office (PO) retailers are to make more for every cash handling transaction under a newly announced deal with major banks to begin in 2026.

Known as Banking Framework 4, a PO statement on 30 April announced 30 banks would participate in the new agreement, which pays the PO for providing services to their customers.

PO CEO Neil Brocklehurst, appointed on the same day the deal was announced (30 April), said the new five-year agreement would protect cash access and ‘increase the income postmasters receive for delivering banking services, a key pillar of our transformation plans.’

New Post Office funding and remuneration for branches

While the PO’s statement failed to reveal the value of the pay rise linked to the banking deal, in March Brocklehurst, then acting CEO, promised it would be a ‘significant increase’.

At a meeting with branch owners and staff on 30 April, PO chair Nigel Railton added: “We’ve made very good progress with the direction of remuneration, but we’re asking for a little more time, in one month we should be able to show you what remuneration for the year will look like.”

He revealed that discussions with subpostmasters on a new pay model had begun on around 26 April.

The delay could be due to the PO recently agreeing a deal with the Department for Business and the Treasury around greater PO funding this year. PO strategy and transformation director Tim McInnes revealed a ‘final agreement’ was reached ‘a couple of weeks ago’, and will see the PO receive £260m in additional funding, taking the total to be given by the government to the PO this year to more than £450m. The director said this was a ‘tremendous achievement’, especially ‘in a year where [the government] is currently nationalising the British steel industry.” The funds are ‘ringfenced’ for the PO’s ‘transformation’ plan.

The banking deal in branches

The banking deal will run until the end of 2030 and includes major investment “in the automation of cash services in-branch to reduce postmasters’ cost-to-serve and to give customers the experience that they have come to expect from modern retailers.”

Senior figures told branch owners this automation would include 6,000 new note counters, 400 telecash recyclers and 400 self-serve cash deposit machines. “Every branch should have a form of automation by the end of the rollout,” the PO official added.

The new CEO said the PO had ‘reinforced’ the message that branches are ‘the best fit’ to provide cash services, and the approach had secured a deal covers a ‘substantially longer’ period of time than previous framework agreements.

The future of the Post Office

The remuneration rise associated with the deal comes as the PO works towards its ‘New Deal for Postmasters’ promise to pay branch owners £120m extra by the end of the March 2026.

In a positive sign, Post Office minister Gareth Thomas backed Brocklehurst’s appointment, the banking framework and the New Deal for Postmasters, stating: “Neil Brocklehurst has provided stability and strong leadership to the Post Office over the last year and I’m looking forward to working with him to deliver for Post Office customers up and down the country…  

“As part of Post Office’s New Deal for Postmasters and Transformation Plan, this new Banking Framework 4 deal will provide a better commercial offer for postmasters over the next five years while improving cash services for the people and businesses that need it most.” 

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