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't see it offering much competition considering it can't even manage to do its own Post Office things efficiently. But I'm all for consumer choice and if anything this will add to broker's natural competitiveness.
Andy Wilgoss, Square Mile
Square Mile's 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't remember when I last visited a Post Office but do recall that the experience was none too pleasant.
Kevin Duffy, Hamptons International Mortgages
It's not really competition. It is not broking but offering a single provider's 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's the same thing with Tesco and Sainsbury's. 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't 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't 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't 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.