Starting from 7 October, the cost of a first-class stamp in the UK will rise to £1.65, marking a 30p increase. This hike, the fifth in less than three years, reflects Royal Mail’s ongoing financial difficulties amid falling letter volumes. Second-class stamp prices will remain unchanged at 85p.
The new price marks a significant rise from the 85p cost of a first-class stamp in March 2022, highlighting a near doubling of the price in just over two years. This follows an earlier increase of 10p in April, when first-class stamps were raised to £1.35 and second-class stamps to 85p.
Royal Mail has attributed the latest price hike to a combination of urgent financial challenges. The company has been grappling with declining letter volumes, inflationary pressures, and the substantial costs associated with maintaining its universal service obligation (USO), which mandates six-day-a-week deliveries.
Royal Mail has indicated that the universal service model, which provides a uniform price for all deliveries, needs urgent reform to align with current communication trends. This announcement follows recent discussions with the UK communications regulator, Ofcom, regarding potential reductions in second-class letter deliveries.
The proposed changes include reducing the frequency of second-class deliveries to two or three days a week, as opposed to the current daily service. This adjustment could cut nearly 1,000 jobs and save the company around £300 million annually. However, no final decision has been made yet.
The move to raise stamp prices comes as Royal Mail reports a dramatic decline in letter volumes—from 20 billion in 2004-05 to approximately 6.7 billion in 2023/24. The average household now receives just four letters a week compared to 14 a decade ago, despite an increase of 4 million addresses.
A Royal Mail spokesperson stated: “With no certainty on regulatory reform and ongoing losses, Royal Mail has been compelled to take necessary actions to address the immediate financial challenges facing the universal service.”
Nick Landon, Royal Mail’s Chief Commercial Officer, emphasised that the company had carefully considered the price increase. “With letter volumes having decreased by two-thirds since their peak, the cost of delivering each letter has inevitably risen. Adapting the universal service to reflect changing customer habits and rising costs is crucial to maintaining the one-price-goes-anywhere service in the future.”
