Post Office financial boycott

The postal union, the CWU, has said that its members will boycott sales of financial services in main post offices for nine working days from 21st November to the 30th.

There are the 372 Crown post offices, which tend to be the principal offices in the town.

The action WON'T affect the operation of bank accounts, foreign exchange or when customers in and ask directly for a service.

The boycott means that if someone comes in to post a parcel, for instance, staff will not try to cross-sell a financial service, such as insurance.

The biggest sellers at the moment are life assurance for the over-50s and credit cards. And there's travel insurance, of course.

Those Post Office current accounts

It's worth taking notice of the launch of the Post Office's current accounts, because of its wide reach - 11,500 outlets - and its presence in communities without a bank branch.

A lot of people will look at them, hoping for convenience, even though most big banks allow you to operate their accounts, in a limited way, in Post Office branches.

So what are the stand out features?

The Standard Account promises relatively low interest on overdrafts and "no unarranged borrowing charges".

But be aware that if you try to make a payment by cheque, Direct Debit or standing order, which would take into an unauthorised overdraft, it's likely to be declined - and you would pay a £15 unpaid item fee.

The Packaged Account also gives you travel insurance, breakdown cover and other extras for £8 a month.

As with all packaged accounts, whether it's worthwhile depends on whether the extra features suit you. This travel insurance only covers travel in Europe, for instance, and it won't always cover your children when they go off on their own. 

The Control Account insulates you from the danger of unexpected charges, important if you are struggling with debt or a low income.

However the £5 monthly charge, or £60 a year, could put people off. As with the other Post Office accounts there are plenty of alternatives available. Here's one list of basic bank accounts and there are others.

The accounts are being tried out in 29 branches in East Anglia (Cambridge, Thetford, Bury, King's Lynn etc), available from today.

The Post Office isn't a bank. The government rejected the idea of turning it into a People's Bank. We already own RBS, after all, and part of Lloyds!

So bear in mind that the banking service is actually provided by Bank of Ireland.

Daily postbag shrinks

The number of letters delivered each day by Royal Mail has shrunk by 4 million since last year.

The drop comes as email extends its hold, and families have to contend with higher stamp prices and financial pressures.

The daily postbag contains 54 million items, down from 58 million this time last year.

The figures emerged as Royal Mail revealed its financial results for the six months to September.

They featured a turnaround from UK losses of £41m in the UK last year to operating profits of £99m this time.

The total volume of letters of the six months fell by 9%, though letter revenue was up 2% - or £44m - following April's rise in stamp prices.

First class stamps went up from 46p to 60p, second class from 36p to 50p.

As genuine letters decline, junk mail is taking over the typical postbag. Marketing mail is approaching half of all letters.

The number of unaddressed letters and fliers has actually been rising.

Soaring stamp prices

Why does it cost so much more to post a letter now, than it did when the penny post was invented by the great Rowland Hill in 1840?

One old penny, or 1d, in 1840 is the equivalent of of 34.8p at current prices.*

So the new First Class rate of 60p is 72% higher. Even 2nd Class is 44% higher, both in real terms.

The United Kingdom was different then, more like a developing country. Wages were low, so were many other costs.

And there was no competition from email.

On the other hand, today we have all the advantages of the latest technology, 21st Century transport and huge economies of scale.

In 1840, letters were sorted by hand and transported around the country by steam train. There were still some mail coaches, so horses played a part as well.

The Penny Post was a a revolution. Beforehand there were various high prices for delivery, and often the addressee had to pay on receipt. Mail wasn't user-friendly.

In came a standard price, for a uniform service, paid for by the sender in advance. Quick and slick.

And there was the Penny Black, followed by the Penny Red - all totally new.

Rowland Hill's project was a risky undertaking. Letter volumes soared, but, initially, revenues plummeted.

Yet the service still washed its faced: net revenues stayed positive.*

Now some streets have deliveries from several different companies, the service is fragmenting and prices are rising sharply in real terms.

Are we going back in time?

*Look at Bank of England inflation calculator
ONS Composite Price Index
Postal Heritage statistics