Post Office delivers £26 million remuneration improvement for Postmasters

• Post Office increases remuneration for banking deposit transactions by 20%, effective April 2023
• New £3 million fund for critical town and city centre Mains branches which are benefitting less from banking growth
• Postmasters to benefit from increases to Royal Mail tariffs, a result of Mails Distribution Agreement negotiated with Royal Mail Group last year

The Post Office last week (Thursday 30 March 2023) announced it has increased total Postmaster remuneration by £26 million for the 2023-24 financial year.

As part of the package of remuneration improvements, Postmasters will benefit from:

• A 20% increase in remuneration for banking deposit transactions, for both the per transaction and the per pound deposited rate, effective April 2023. This builds on the previous doubling of the per transaction rate for banking deposits announced last August.
• As announced on 3^rdMarch, around £11m of Royal Mail tariff and inflation linked increases for parcels and stamps negotiated under the Mails Distribution Agreement with Royal Mail Group which came into effect in 2022.
• Doubling of Payout transaction remuneration confirmed to stay at increased levels.
• A 12.87% increase in Mailwork payments.
• A 9.5% increase in outreach remuneration.

Today’s announcement follows a package of remuneration increases made to Postmasters last August, in which Postmasters received a one-off lump sum worth 7% of their Mails and Travel Money remuneration based on the five months of trading; a doubling in the per transaction payment for banking deposits; payments to Postmasters for balance enquiries and failed banking transactions; and a doubling in remuneration for all Payout transactions backdated to 1 April 2022. At the time Post Office said this would be in effect until 31 March 2023. Post Office has today confirmed this higher remuneration rate will continue into the 23/24 financial year.

Martin Roberts, Group Chief Retail Officer, said: “We recognise that Postmasters are facing a tough trading environment, with inflation, business rates and energy prices all adding to the economic challenges. We’ve listened to Postmasters who tell us that the bank branch closures mean they are the only location where consumers and businesses can do their banking, which is why we’re increasing banking deposit remuneration by 20%. Alongside this, as a result of the deal we agreed with Royal Mail last year, Postmasters will also benefit from Royal Mail tariff increases.”

During the Covid-19 pandemic, Post Office provided a significant financial support package for Postmasters. This included:

• All independent postmasters receiving 100% of their remuneration in April 2020 and 90% in May 2020. The guarantee covered both their fixed and variable remuneration.
• Postmasters benefitting from a 15% top-up of their variable remuneration in June 2020.
• The establishment of a hardship payment application for Postmasters that struggled or were unable to open during the Covid-19 pandemic.
• A Travel Support Scheme in summer 2021 for branches that were impacted by the then travel uncertainty as a result of the Covid-19 pandemic.