Will the Post Office become a threat to intermediaries?

The Post Office is now offering personal loans, the first in a series of low cost financial products to be launched as part of its personal finance joint venture with Bank of Ireland.

People will be able to borrow between £1,000 and £25,000 and interest rates on the loans will range from 8% to 15%.

The Post Office plans to offer car insurance, credit cards and savings accounts within 18 months. It has a distribution network of 16,500 branches – more than all the other banks and building societies put together – which are used by an estimated 29 million customers each week.

Initially, products will only be available by telephone, mail or the internet but not through branches.

So, Mortgage Strategy asks: Could the Post Office become a threat to the intermediary market?

Ray Boulger, Charcol

The rates for the personal loans are uncompetitive and extremely high, especially for loans up to £7,500. It seems to me that it is trying to trade on its name and hoping that this will suck people into buying products. The fact that it is not going to sell the products directly through branches means it is not offering the one thing that could have made them different.

Kevin Morgan, EZI Financial

I can&#39t see it offering much competition considering it can&#39t even manage to do its own Post Office things efficiently. But I&#39m all for consumer choice and if anything this will add to broker&#39s natural competitiveness.

Andy Wilgoss, Square Mile

Square Mile&#39s clients do not generally have the time or inclination to use Post Office services and I do not see this offering as a threat. I can&#39t remember when I last visited a Post Office but do recall that the experience was none too pleasant.

Kevin Duffy, Hamptons International Mortgages

It&#39s not really competition. It is not broking but offering a single provider&#39s product. And, unless they are in the middle of nowhere, most Post Offices are in the high street next to rival providers.

Roy New, sole broker

I do not think it will be a threat to intermediaries – it is more likely that the Post Office will come to us and ask us to help it. It&#39s the same thing with Tesco and Sainsbury&#39s. Plus those people who cannot go to Halifax or Nationwide are not going to be able to go to the Post Office either.

Mike Fitzgerald, Brentchase Financial Services

People can go on the web but they like to talk to somebody face-to-face. But that means in suitable surroundings – either in their own home or in an office where the door can be shut. You don&#39t get that in your average Post Office with seven people breathing down your neck for their stamps.

Mike Fry, Halton Insurance Services

I welcome the competition although I do note that people go to the Post Office for tax discs and pensions and it can&#39t even seem to cope with that. This will be a good thing in that it will show them up to be hopeless compared with brokers.

Simon Chalk, Mortgage portfolio Services

I don&#39t see this as a threat. Any intermediary worth their salt will have a fairly loyal client bank and introducers they speak to frequently. We have nothing to fear.