The Post Office Savings Bank
IntroductionThis is a small assemblage of miscellaneous material, originally written up (to the best of my recollection) for the Wessex Federation Roadshow, and then used as a demonstration for the GBPS displays section. A 16 sheet selection from it won the GBPS Theo Jones Open Class Salver in 2018.
The growth of the savings movement was related to the mass migration from the country to the towns during the Industrial Revolution – the insecurities of employment meant that the working classes needed to be able to save money for poor times. The promotion of thrift was also a particular concern among Victorian social reformers, as it was held to inculcate virtues.
In 1850 Charles William Sikes, a member of a prominent Huddersfield banking family, wrote anonymously to the Leeds Mercury advocating that working class organisations should establish savings banks – an idea taken up by the Yorkshire Union of the Mechanics' Institute. The success of these inspired Sikes to address an open letter to the Chancellor of the Exchequer urging that a national scheme be implemented.
This gained patrons among members of the Post Office establishment, and Sikes presented a measure for a Post Office Savings Bank that found favour with both Rowland Hill and the Chancellor, William Gladstone, who successfully steered a Bill through Parliament despite strong opposition from the City and the Bank of England. It received the Royal Assent on 17th May 1861 and the first such bank opened on 16th September 1861. Sikes received a knighthood in 1881.
The Post Office Savings Bank allowed savers to deposit and withdraw small amounts of money at a specified post office up to an annual limit of £30 and a total limit of £150, although interest – paid at the rate of 2.5%, sixpence a year or ½d per month on each £1 – could be allowed to increase this to a maximum of £200. The money deposited was held in a special account and invested in British Government securities to provide the revenue needed to cover the costs of interest and administration.
The scheme grew rapidly, with 2,500 existing money order post offices transacting Savings Bank business by the end of 1863, and doubling in size roughly every ten years until by 1900 there were 20,500 post offices holding accounts for 8,440,000 depositors with a liability of £135 million. From the 1880s a separate scheme allowed this money to be used for the purchase of Government Stock, and later savings stamps were introduced for the accumulation of smaller sums than the minimum deposit of one shilling, and the 'National Savings' movement was encouraged by the two World Wars as a means of promoting the war effort. The Bank and National Savings remained a popular Post Office institution and are still in operation today.