Royal Mail: First-class stamp price to rise 15p in October as postal service faces 'increasing cost pressures'
Since 2012, the year before Royal Mail was privatised, stamp prices have more than doubled
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Royal Mail has announced that the cost of a first-class stamp will increase by 15p at the beginning of October, while the cost of a second-class stamp will remain the same.
The delivery company has said a first class stamp will cost £1.25 from October, as a result of "increasing cost pressures" and the "challenging economic environment" the company is experiencing.
The rise in prices of goods and services, known as inflation, can affect the cost of providing postal services. The cost of operating a postal service includes expenses such as labour, fuel, transportation, and infrastructure maintenance.
The new price will go into effect on Monday 2 October. Since 2012, the year before Royal Mail was privatised, stamp prices have more than doubled.
It said that the price of a first class stamp is now the same as the median price in Europe, and at 75p, a second class stamp is cheaper than the 94p European average. The UK is one of the most densely populated countries in Europe.
“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,” said Royal Mail chief commercial officer Nick Landon.
With the rise of digital communication and online transactions, traditional mail volumes have been declining. To compensate for the decrease in revenue from declining mail volumes, postal services may increase stamp prices.
“Letter volumes have reduced dramatically over recent years," said Landon. "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.”
Royal Mail also blamed the lack of reform of the so-called universal service obligation (USO), which forces it to deliver letters six days a week to all 32 million addresses in the UK - regardless of location - at a uniform and affordable price.
The obligation is designed to ensure that everyone has access to postal services, and Royal Mail is required to deliver mail to all areas of the UK, in both densely populated urban areas and sparsely populated rural areas , at the same basic rate.
The company said “urgent reform” was needed to the service obligation. It said: “Royal Mail 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 that research from 2020 by regulator Ofcom showed that providing a letter service only on weekdays would meet the needs of 97% of consumers and small and medium-sized businesses.
“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,” it said.