Royal Mail to hike price of first class stamps in WEEKS

ROYAL Mail has announced it will increase the price of stamps again next month.

The delivery giant said the price of first-class stamps will increase by 30p to £1.65, the second rise in a year.

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Royal Mail said the price increase will come into force on October 7.

First class stamp prices increased by 10p to £1.35 in April and by 10p to 85p for second class.

The company has confirmed that second class stamps will remain at 85p, as these are currently capped until 2029 in an effort to keep the sending of letters affordable.

Royal Mail said it has tried to keep price increases as low as possible in the face of declining letter volumes, and inflationary pressures.

It also cited the costs associated with maintaining the so-called Universal Service Obligation (USO) under which deliveries have to be made six days a week.

Postal regulator Ofcom said yesterday that Royal Mail could be allowed to drop Saturday deliveries for second class letters under an overhaul of the service.

Regulator Ofcom, which has been consulting on the future of the universal postal service since January, said it is now focusing efforts on changes to the second class service while keeping first class deliveries six days a week.

Under the plans being considered, second class deliveries would not be made on Saturdays and would only be on alternate weekdays, but delivery times would remain unchanged at up to three working days.

Ofcom said no decision had been made and it continues to review the changes, with aims to publish a consultation in early 2025 and make a decision in the summer of next year.

Royal Mail has urged the Government and Ofcom to review its obligations, arguing that it is no longer workable or cost-effective, given the decline in addressed letter post.

It said letter volumes have fallen from 20billion in 2004/5 to around 6.7billion a year in 2023/4, so the average household now receives four letters a week, compared to 14 a decade ago.

The number of addresses Royal Mail must deliver to has risen by 4million in the same period meaning the cost of each delivery continues to rise.

Royal Mail said the universal service needs urgent reform, adding: "The minimum requirements of the universal service haven’t changed for over 20 years despite major changes to how people communicate.

“We have no certainty on regulatory reform and the rate of letter decline and ongoing losses means that Royal Mail has had to take the necessary steps within its power to address the very real and urgent financial sustainability challenge the universal service faces right now.

Nick Landon, Royal Mail’s chief commercial officer, said it always considers price increases "very carefully".

However, he said, as letter volumes have declined by two-thirds since their peak, the cost of delivering each letter has inevitably increased.

He added: “A complex and extensive network is needed to get every letter and parcel across the country for a single price – travelling on trucks, planes, ferries and in some cases drones before it reaches its final destination on foot. We are proud to deliver the universal service, but the financial cost is significant.

“The universal service must adapt to reflect changing customer preferences and increasing costs so that we can protect the one-price-goes anywhere service, now and in the future.”