The current account will initially launch in a small number of Post Office branches before a wider roll-out planned for 2014.

Almost three million customers already access Post Office financial services products including savings accounts, mortgages, motor, home and life insurance, credit cards, through a network of over 11,500 branches – more than all the UK banks combined.

The Post Office is the latest big-name brand to enter high street bank territory. Marks & Spencer launched its first current account last summer but the product only targeted loyal M&S shoppers rather than the mass market.

Michael Ossei, personal finance expert at comparison site, uSwitch.com, said: “The Post Office launch is great news that has been a long time coming. It will be particularly welcomed by those in rural areas as well as vulnerable groups such as the elderly that find it hard to get to a bank. Many have been recently hit by local branch closures, so this news should make life a lot easier.

“With low levels of consumer confidence in traditional high street banks, the current account market is all for the taking.”

According to uSwitch research, six out of ten people believe that new providers have learned from the mistakes of more traditional high street banks and one in three would like to bank with a company that offers other useful services aside from banking.

Ossei added: “High street banks should see this as a serious threat, especially with the new rules in September that make it easier for customers to switch current account.”

From the autumn, banks will have a maximum of seven days to switch a customer’s current account to a rival institution.

Kevin Mountford, head of banking at MoneySupermarket, said: “Many people are put off switching current accounts by the perception that it can be a complex process. However, the reality is that current account switching is easy and the introduction of a new seven day switching promise later this year will make the process even easier, so the launch of this new account couldn’t be more timely.”

Full details of the Post Office current account are expected over the coming weeks.