First Class stamps will go up 15p to £1.25 on October 2, Royal Mail has revealed, due to increasing cost pressures on the business and a dampened demand for letters.
The price of Second Class stamps will remain at 75p.
The postal service provider said letter volumes have fallen from 20 billion in 2004/5 to 7 billion a year in 2022/3, while the number of addresses has risen by four million in the same period.
First Class stamp prices have been slowly edging up, breaking the £1 barrier for the time in April, increasing by 15p to £1.10. This followed an increase of 10p the previous year, which took the price to 95p.
In a statement on its website, Royal Mail has said the new price of a First Class stamp is in line with European median prices and it has sought to keep price increases “as low as possible in the face of declining letter volumes”.
But against a backdrop of bitter industrial action from the company’s employees, amid disputes over pay and working conditions (only settled last month) which has led to enormous disruptions, missing parcels and weeks worth of delays for both businesses and consumers, many will feel hugely frustrated at now having to pay significantly more for the service.
Royal Mail calls for urgent Government review
Royal Mail has blamed the price increase on a lack of reform to the Universal Service Obligation (USO) – which requires them to deliver letters to all 32 million UK addresses six days a week, despite a significant structural decline in letter volumes.
“The USO is in need of urgent reform,” the postal and courier service provider said. “It has been clear that the cost of delivering an ever-decreasing number of letters to an ever-growing number of households six days a week is unsustainable.”
It said Ofcom research in 2020 revealed that a five-day-a-week Monday to Friday letters service would meet the needs of 97% of consumers and SMEs.
“Given the ongoing decline in letters, Royal Mail continues to call on Ofcom and the Government to review and modernise the USO to better reflect changing customer needs,” the company said.
“We understand the economic challenges that many of our customers are currently facing and have considered the price changes very carefully in light of the significant decline in letter volumes,” Royal Mail’s CEO Nick Landon said.
“Letter volumes have reduced dramatically over recent years, down more than 60% from their peak in 2004/5 and 30% since the pandemic. It is vital that the Universal Service adapts to reflect this new reality,” he added.
At the full year results in May 2023, Royal Mail reported a £419 million loss.
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