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Post Office has announced an increase of 10 percent in the remuneration of postmasters, following a six-month review.

The rise will be effective for 2020-21 and the increase will be based on the fees postmasters received in 2018-19.

Newly joined Post Office chief executive Nick Read said the move is part of major drive to reset the relationship with postmasters.

“Post Office branches are the backbone of our business and the heart of their communities. I am determined that the commercial partnership we enjoy with them genuinely reflects that and I am delighted to be able to begin that process through [this] announcement,” he commented.

The review on pay rise included engagement with the National Federation of SubPostmasters (NFSP), Postal Affairs Minister Kelly Tolhurst and officials in the Department for Business, Energy & Industrial Strategy, retail partners and around 50 independent postmasters.

Welcoming the announcement, NFSP chief executive Calum Greenhow said the progress made this year should continue in future.

“It is imperative that we anticipate and adapt to future changes in the marketplace to ensure that subpostmasters are equipped and incentivised to grow their footfall and income. That is the only way we will be able to guarantee the long-term success of the overall business,” Greenhow said.

Postmasters will receive increased fees for providing everyday banking services; additional payments to smaller, rural Post Offices for the services they provide; increased payments for handling digital passport applications; and increased payments for handling online travel currency purchases that are collected in a branch.

The increase will cost Post Office £37 million, comprised of a £20 million increase during 2020-21 and the £17 million per annum already announced in August 2019.