The unplanned nature of post office closures threatens to hit the UK’s poorest communities hardest, undermining the high profile government campaign to increase financial inclusion.

But an enhanced Post Office Account could help safeguard the network and increase financial inclusion.

There are still two million adults without bank accounts in the UK, but evidence shows that this underestimates the full extent of financial exclusion as many accounts lie dormant because they are not suitable for those on low incomes. Without a drastic change in policy, these people will remain financially excluded and the poor will continue to pay more for essential services such as utility bills, where charges are higher for those unable to pay by direct debit.

Because high street banks have failed to respond to calls for greater transparency on lending practices and branch location by postcode the availability of banking services cannot be clearly identified. This means that no analysis is possible of the impact of the current round of Post Office closures on some of the most vulnerable people in the UK.

As previous NEF research has shown, the Post Office is a keystone of the financial security of the poor and small businesses. By proceeding with Post Office closures, government not only destroys a vital social network, but is also, inadvertently, undermining efforts to combat financial exclusion.

Instead, by re-tendering for an enhanced Post Office Card Account (POCA) able to provide basic banking services, the Government could both enhance the future viability of the Post Office network, and increase financial inclusion.