Farepak went under in the run-up to Christmas 2006, leaving thousands of families with the loss of savings and none of the Christmas treats and presents that they had been counting on.
In the wake of the collapse, the Treasury conducted a review, which identified a gap. This will be filled by the Post Office Christmas Club -- a scheme that will be governed by strict regulations and held in a protected account under the control of the Bank of Ireland.
The Post Office said it would offer members a secure and convenient way to save for Christmas 2008, and also offer membership rewards, details of which will be unveiled in January.
The scheme will allow users to make deposits of as little as £5, and save up to £1,000 for the year. Funds will be locked away until November 1, when the Christmas Club card can be used as a pre-paid debit card with retailers signed up to the scheme, or exchanged for gift vouchers at Post Office branches. It has signed up around 200 retailers so far, including Argos, Boots, Debenhams, Sainsbury's and WHSmith.
Alan Cook, managing director of the Post Office, said: "As one of the UK's most trusted brands with an unparalleled retail network, we are responding to the need for a safe and convenient way for people to put money aside for Christmas."
Customers will be able to start saving money starting from January.