Second class postage stamp price rise capped for a year as Royal Mail tackles delivery targets

Second class postage stamp price rise capped for a year as Royal Mail tackles delivery targets It comes as Royal Mail bids to reform to its service as part of wider measures to battle what Ofcom described as 'unacceptable' delivery performance Royal Mail is set to be banned from raising second class stamp prices by more than inflation for another year. The cost of sending a letter second class is currently 91p and this would remain "flat" in real teams until March 2028 under the new proposals by Ofcom. The current cap was set in 2024 and is pegged to inflation. This means the cost of a second class stamp can still rise but not by more than inflation. The cap had been due to expire in March 2027. It comes as Royal Mail implements reforms to its universal service as part of wider measures to battle what Ofcom described as "unacceptable" delivery performance. The regulator Ofcom has fined Royal Mail more than £37million in the last three years for missing delivery targets. Its latest results show 85% of first class mail was delivered the next working day, short of its 90% target. Royal Mail has blamed a massive drop in letter volumes, high staff sickness levels and ongoing structural changes for its missed targets. Royal Mail has increased stamp prices seven times in four years. Fergal Farragher, policy director at Ofcom, said: “To secure the long-term future of our postal service for consumers, we can’t look at affordability, sustainability or reliability in isolation. These are interconnected challenges that have to be considered together. “The number of letters being sent is declining and Royal Mail’s financial position is stark, which is why we reformed its universal service obligations last year. “But the company has been slow to implement this, which meant we weren’t able to consult on the future of stamp prices earlier this year, as originally planned. “The company is now making some progress with its universal service reforms and improvements to its delivery performance, which has been unacceptable in recent years. However, we need a clearer picture of their impact before determining our long-term approach to stamp prices, which we’ll do next year. “In the meantime, we’re proposing that second class stamp prices should stay flat in real terms for a further year, to make sure an affordable option remains available.” A Royal Mail spokesperson said: “Ofcom’s announcement today recognises the substantial decline in letter volumes is threatening the sustainability of the universal postal service, frustratingly yet again it has delayed its decision on one of the key actions needed to address it. “Letter volumes have declined by 70% since their peak, whilst addresses have grown by more than four million. This means that the cost of delivering every letter is increasing. “At the same time, prices remain well below international comparisons at 91p for a second class stamp compared to an average £2.07 across Europe. “We have proposed a stamp discount scheme that will better support 10 million low income customers, while helping to secure the future of the Universal Service for everyone across the UK. “Quality of service is improving as we roll out our new Universal Service delivery model, and we remain on track with the Quality of Service Improvement Plan we set out in April. “We will work constructively with Ofcom on options for ensuring Royal Mail has the pricing flexibility needed to ensure the UK’s postal service remains reliable, affordable and sustainable for the long term.” David Falkner, chief executive-elect of the Greeting Card Association said: “This is a welcome step by Ofcom that recognises the significant cost pressures on consumers and small businesses as the Government focuses on measures to address the impact of cost-of-living challenges for families. “Like Ofcom, we also acknowledge Royal Mail’s hard work implementing a new delivery model to drive standards and support their call for more progress. “Our members are keen for them to succeed. They depend on a reliable and affordable service, and they acutely understand the importance of restoring the service back to the standards required by Ofcom.