The government has announced plans to use the Post Office network to offer financial services.

In a move likely to improve the viability of the 11,500 strong network, the Post Office will be able to offer budgeting and savings accounts, a current account and greater access to individual accounts from Royal Bank of Scotland and Santander.

Mortgages could also be available up to a 90% loan to value and a Saving Gateway account for people of working age on lower incomes is also mooted.

Santander business account holders will also be able to access their funds at the Post Office.

Business Secretary Lord Mandelson today also announced £180 million of new funding for the Post Office.

He said: “The Post Office is a well-loved community institution and this move will bring more banking services back to the heart of those communities.””