The UK government today set out details of its plan to create a Post Office Bank offering new financial services locally.
The 'People's Bank', based round a backbone of 11,500 post offices, is intended to encourage saving and provide credit for those on low incomes.
The first of the new services - a children's savings account - will be introduced in the next 12 months, the government said.
The mortgage product, backed by the Bank of Ireland, will also be introduced within the next year.
'Since the global banking crisis we have set about reinventing the financial services industry piece-by-piece, building a system that is fairer, trusted and more responsible,' Business Secretary Peter Mandelson said.
'Today is the next step in that process. The Post Office is a well-loved community institution and this move will bring more banking services back to the heart of those communities,' he added.
£180m sterling of new funding for the Post Office in 2011 and 2012 was also announced today.
In his budget statement last week, finance minister Alistair Darling guaranteed universal access to a basic bank account.
Under the proposals, Labour will expand the financial products on offer at the Post Office, to include budgeting and savings accounts, a current account and greater access to individual accounts from Santander and part-nationalised Royal Bank of Scotland.
Those who hold business accounts with Santander will also be able to access their funds at the Post Office, the government said, and the development of a Post Office business bank account is also being considered.
Following Labour's budget pledge to scrap duty on house purchase for homes costing below £250,000 for first-time buyers, the Post Office will offer 90% loan-to-value ratio mortgages.
Labour also plans to boost the number of savers by contributing 50 pence for every £1 saved in a new savings account available for low-paid workers.
