One-Month Warning to Buy Stamps Before ‘Urgent’ Huge Price Increase
Royal Mail has announced an increase of 30p in the price of first class stamps, citing an “urgent” financial challenge. On October 7, the price of first class stamps will jump to £1.65, while second class stamps will remain at 85p. This means that individuals have a month to purchase stamps at the current rate. The price of first class stamps had already increased by 10p to £1.35 in April and by 10p to 85p for second class.
Royal Mail said it has sought to keep price increases as low as possible due to declining letter volumes, inflationary pressures, and the costs associated with maintaining the Universal Service Obligation (USO), which requires deliveries six days a week.
Postal regulator Ofcom is considering allowing Royal Mail to eliminate Saturday deliveries for second class letters. This potential change would mean second class deliveries would not occur on Saturdays and only on alternate weekdays, while delivery times would remain up to three working days.
Royal Mail highlighted that letter volumes have significantly decreased from 20 billion in 2004/5 to approximately 6.7 billion a year in 2023/4. On average, households now receive four letters per week compared to 14 a decade ago. Despite this drop in volumes, the number of addresses Royal Mail must deliver to has increased by four million during the same period, leading to rising delivery costs.
Royal Mail expressed the need for urgent reform in the universal postal service, stating that the minimum requirements have remained unchanged for over 20 years despite significant shifts in communication preferences.
Nick Landon, Royal Mail’s chief commercial officer, emphasized the significant cost of delivering each letter, given the substantial decline in letter volumes. He acknowledged the need for the universal service to adapt to changing customer preferences and increasing costs to maintain a consistent one-price-goes-anywhere service both now and in the future.
Royal Mail plans to address the financial sustainability challenges it faces while awaiting regulatory reform certainty and addressing the ongoing losses resulting from the rate of letter decline. The company aims to preserve the universal service amid changing communication landscapes and escalating costs.