Published: 2024-03-04 by, News Team in the National news category

Royal Mail Announces Stamp Price Hike: Fourth Increase in Two Years

Royal Mail has announced yet another round of price increases for stamps, marking the fourth hike in two years. On April 2, the cost of a first-class stamp will jump by 10p to £1.35, while second-class stamps will see an equal increase, reaching 85p. The postal service's decision is attributed to the double impact of rising operational costs and a decline in demand for traditional letters.

This move follows warnings from the financially struggling company regarding the challenges it faces due to increased costs and a decrease in letter deliveries. The company, which reported a loss of £419 million last year, emphasized the strain on its resources caused by maintaining a vast delivery network designed for 20 billion letters while currently handling only seven billion.

Nick Landon, Royal Mail's Chief Commercial Officer, explained, "It is no longer sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion." He pointed out that the decline in letter volumes forces postal workers to cover more ground, walking over three times the distance to deliver the same number of letters, thereby increasing delivery costs per letter.

The cost of sending a second-class letter, now at 85p, is now equivalent to what it cost to send a first-class letter at the beginning of 2022. Despite the price increases, Royal Mail stated that adults typically spend less than £7 a year on stamped letters, highlighting that the cost of stamps in the UK remains below European averages.

The company's financial challenges are further compounded by a lack of reform in the Universal Service Obligation (USO), requiring the delivery of letters to all 32 million UK addresses six days a week. While the USO has contributed to Royal Mail's losses, parcel deliveries have become a lucrative business, with the company becoming a private entity about a decade ago.

Amidst the ongoing challenges, discussions about potential reforms are gaining traction. The UK's postal regulator, Ofcom, acknowledges that the current postal service is "getting out of date" and calls for necessary actions. Proposed reforms could include reducing delivery days from six to five or even three, potentially saving the company significant operational costs.

Consumer groups have criticized the latest price hikes, particularly at a time when postal delays have left many waiting for crucial letters, such as medical appointments, legal documents, and benefit decisions. Morgan Wild of Citizens Advice urged Ofcom to hold Royal Mail accountable, stating that it is unacceptable for consumers to pay more for an unreliable service, especially considering years of missed delivery targets. As the debate continues, the balance between maintaining a reliable postal service and addressing financial challenges remains a significant challenge for Royal Mail and its stakeholders.

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