Stamp prices: First-class stamps to cost 60p

 
First-class stamps A first-class stamp currently costs 46p and a second-class stamp costs 36p

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A first-class stamp will rise in price from 46p to 60p from 30 April after the regulator lifted some price controls on Royal Mail.

A second-class stamp will go up from 36p to 50p - some 5p below the top price allowed by Ofcom.

The regulator has allowed Royal Mail to set the price of first-class and business mail.

It claimed the future of the universal service was at "severe risk" without relaxing controls.

The 30% price rise in first-class stamps, and 39% rise for second-class, mark the biggest annual increase in percentage terms since 1975. Ten years ago, a first-class stamp cost 27p, and a second-class cost 19p.

Over the next seven years, the price of second-class stamps will be capped at 55p but this limit could rise with inflation each year.

Royal Mail said that the cost of posting Christmas cards in 2012 will be the same as last year for consumers on Pension Credit and Employment and Support Allowance or Incapacity Benefit.

They will be able to buy up to three books of 12 stamps - 36 stamps in total - in one purchase from any Post Office branch from 6 November until the last posting dates before Christmas. Individuals must provide evidence that they are in receipt of these benefits.

Do members of the public know how much a first-class stamp costs?

'Severe risk'

Ofcom said that changes needed to be made to price limits, because the future of the UK's universal, six-day-a-week postal service was "at severe risk" as people switched to using text messages, e-mails, and online messaging.

After consultation, it has now confirmed plans to lift some of the price controls - a move recently backed by a committee of MPs.

The Commons Business Committee did raise concerns about vulnerable customers, and Ofcom said the cap on the cost of second-class mail was designed to protect this group of people.

Shortly after the announcement from Ofcom, Royal Mail announced exactly how much it will charge for stamps from 30 April.

Start Quote

No-one likes to raise prices in the current economic climate but, regretfully, we have no option”

End Quote Moya Greene Royal Mail chief executive

It announced:

  • The price of a first-class stamp for a standard letter will go up from 46p to 60p on 30 April
  • A second-class stamp for a standard letter will go up from 36p to 50p on the same date
  • A first-class stamp for a large letter weighing up to 100g will rise from 75p to 90p
  • A large letter sent second-class will cost 69p, rather than 58p
  • Parcels, franked mail, recorded post, redirection services and PO Box use will also be going up in price

Royal Mail's chief executive, Moya Greene, told the BBC that the one-price-whatever-the distance universal service was under threat because the organisation's financial situation had been "very fragile" for some time.

"In the core business in the past four years we have lost over a billion pounds," she said.

"No one likes to ask their customers to pay more, I certainly wouldn't do it, especially in these economic times, if it were not absolutely essential."

But she said there was "not an affordability issue" as stamps cost less than a chocolate bar.

Historical prices graphic
Controls

Ofcom said that the average household spent around 50p per week on post, with low-income families typically spending less.

The changes made by the regulator will mean:

  • Royal Mail, not the regulator, will set prices on the majority of products, including first-class and business mail
  • Second-class stamps must not be charged at more than 55p. This limit will rise in line with the Consumer Prices Index (CPI) measure of inflation for each of the next seven years
  • Small parcels and large letters weighing up to 2kg sent second class will also eventually have a price cap, but not in 2012-13
  • There will be some control of what Royal Mail can charge competitors to access its network

"Ofcom's decisions are designed to safeguard the UK's postal service, ensuring it is sustainable, affordable and high-quality, to the end of the decade and beyond," said Stuart McIntosh, of Ofcom.

"The measures ensure that Royal Mail's products remain affordable for vulnerable consumers and small businesses."

Targets

Royal Mail delivered 16 billion letters to around 28 million addresses last year. However, since 2006, there has been a 25% decline in postal volumes with further falls expected.

Letterbox Royal Mail said it wanted to ensure a service was available in all areas of the country

Ofcom, which took over regulation of the industry from Postcomm, said that Royal Mail might not be able to keep up with current standards without regulatory changes.

The regulator demands that Royal Mail targets a record of delivering 93% of first-class mail by the next day and 98.5% of second-class mail must arrive within three days of posting.

Royal Mail's letters business made a loss of £120m in 2010-11.

A Department for Business spokesman said: "Price rises are never welcome. However, ministers are clear that the top priority is to protect the universal service on which people rely.

"But this service comes at a cost, and its provider, Royal Mail, needs to be financially viable. The most important thing is to secure the universal service, but price rises are only one part of the story, the successful modernisation of Royal Mail is also crucial."

Up to 90% of Royal Mail can be sold, following an Act of Parliament last year.

This was most likely take place in the first quarter of 2014, probably through a sale of shares, according to chief executive Ms Greene.

Reaction

Sharon Little, chief executive of the Greeting Card Association, said more cards were sent per person in the UK than anywhere else in the world, but the change in prices was a "worry".

She said that the association understood the pressures on Royal Mail, but she called for the group to extend its price freeze this winter to all pensioners, not just those on certain benefits.

The majority of people, she said, sent their Christmas cards by second-class post, but birthday and mother's day cards tended to be send first-class.

Small businesses that made cards tended to sell upmarket products, so she hoped the increasing price of stamps should not affect these businesses too much.

Billy Hayes, general secretary of the Communication Workers Union, said: "Those people who baulk at the idea of stamp price rises should understand that it comes directly from government decisions to privatise this industry."

John Walker, national chairman of the Federation of Small Businesses, said: "With 84% of small firms dependent on Royal Mail, it is welcome news that they will receive discounts on some products.

"However, it does not go far enough. Rapidly raising stamp prices now will be bad for business. With small businesses and consumers being hit by other rising costs, this has come in at a time when they can ill-afford it."

Royal Mail price increases

Stamps Old price New price

Source: Royal Mail

First-class stamp

46p

60p

Second-class stamp

36p

50p

Large letter up to 100g: first-class

75p

90p

Large letter up 100g: second-class

58p

69p

Parcels

First-class up to 750g

£1.58 - £3.05

£2.70

Second-class up to 750g

£1.33 - £2.61

£2.20

Other

First-class 100g franked letter

39p

44p

Second-class 100g franked letter

28p

31p

Recorded signed for item

77p

95p

 

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  • rate this
    0

    Comment number 581.

    Increase in price for a shoddy service. Mail addressed to me arrives in different places all over glasgow, we receive mail from different streets on a weekly basis, postal workers leave "sorry you weren't in" cards when we are sitting a matter of feet from the front door, all personal experience. Pay more for a service that forgets who it's customers are? I struggle to trust them as it is!

  • rate this
    0

    Comment number 580.

    That's interesting, the Royal Mail thinks that as people aren't buying the products (stamps, that is, not all the other fancy 'special delivery services, such as signature with recorded delivery to prove it gets there)...that this justifies putting up the prices. Does that work? If you ran a market stall and said "No one is buying my stuff so I guess I'll put up the prices", would you sell more?

  • rate this
    +1

    Comment number 579.

    Yes I do think this needed to happen, as you need high reasonable margines to operate efficiently.
    The big disadvantage is competition and the Unions.
    Let's hope they go forward with the Nation behind them, though electronic communication development may end up being the deciding factor.
    The GPO need visionaries now to adapt the service for the future if they are to survive.

  • rate this
    +2

    Comment number 578.

    This will just accelerate the switch to e-mail. It would be far more sensible to allow the Royal Mail to charge variable rates depending on the mail's route

  • rate this
    +3

    Comment number 577.

    Postage has always been remarkably cheap and I don't resent 60p to use it, that's less than the price of a chocolate bar these days.

    My worry is that it's not about balancing the books, it's a marker for private investment/buy out which we all know will regularly push up prices!

    How about we see how Royal Mail does with these new prices before selling it off like the NHS & Prisons?

  • rate this
    +1

    Comment number 576.

    Its still not too bad. I suppose I will think twice about sending letters rather than emailing where possible but birthday cards and so on have to be sent. It might just put off businesses who send junk mail too. On balance fair enough for me.

  • rate this
    -1

    Comment number 575.

    Right, now give us an alternative to Royal Snail and let's see if they can still put up their prices by 14p if they have competition. Sorry Royal Snail but as there is no competition for letters it's email for me. It doesn't cost me 60p. You've started to cut your own throat!

  • rate this
    0

    Comment number 574.

    "Those people who baulk at the idea of stamp price rises should understand that it comes directly from government decisions to privatise this industry."
    typical head-in-the-sand statement from the unions. How about you offer some practical positive alternatives for a change - that doesn't involve spending tax payers money on subsidies...

  • rate this
    +1

    Comment number 573.

    546.
    Whistling Neil

    Ever noticed some of your mail has been rubber stamped "Rule nine- out of course mail" or similar?

    Care to comment neil?

  • rate this
    +2

    Comment number 572.

    I send by mail maybe one or two items a year and they are that important I always send them recorded delivery and insured, which costs around £2.70 or so, dependant on the size and destination.
    I am past caring about the cost of mail, the only things that arrive in it are bills and I can do without them.

  • rate this
    +2

    Comment number 571.

    I have just seen the other price rises. 69p to 87p for postcard. Small packet 100g to Europe £1.49 to £2.70, and to World 100g £2.07 to £3.30

    This is ridiculous. RM is going to make a bigger loss this coming year as people will stop using the post. No more People's Post, and back to the old days when only the rich could afford it.

  • rate this
    +1

    Comment number 570.

    Well, I agree the price is amazingly low- but since my mail is impounded for 4 days each time any of it won't fit through my mailbox, it's hard to be too sympathetic. Worse, the trek to the Delivery Office for my impounded mail makes me late for work: can only collect till 10AM. Even a courier will leave stuff in a safe place... not the PO!

  • rate this
    +1

    Comment number 569.

    I own an small chain of independent opticians practices and we send out reminder cards to our patients to tell them their eye tests are due using second class stamps. We send out about 10000 a year. This change will cost us £1400 a year. I'm buying my 10000 stamps now!

  • rate this
    0

    Comment number 568.

    @263

    Hopefully after this Canadian woman has fired all the excess baggage staff (about 50% of total) and their pensions, maybe we can realistically price our post from then onwards?

  • rate this
    +2

    Comment number 567.

    Quite frankly When we compare with European prices we ve got nothing to moan about. Royal mail is good value for money. O.K. this applies to stamps but look at parcels.
    Costs of shipping a parcel of 2 KG UK to UK 4.41GBP
    Costs of shipping a parcel France to France 8.1EUR (6.7GBP)
    Costs of shipping from France to UK 12.6EUR (10GBP)

    So what are we moaning about?

  • rate this
    0

    Comment number 566.

    I initially thought that a rise of 30% to 60p for a First Class stamp in one hike was a lot, but I have to agree with many here that actually 60p to send a letter from one end of the country to the other to arrive the next day is actually vary cheap, & I'd have no proplem paying that. Some people do need to really think about the logistics of delivering your letter before complaining. 60p is cheap

  • rate this
    +5

    Comment number 565.

    Start of a downhill spiral unfortunately. As Royal Mail's overheads will be fairly fixed, as the quantity declines the price must rise. This will continue to spiral until the company is unable to meet its costs at any price.

    The world is changing, its not Royal Mail's fault that there services are no longer what they once were.

  • rate this
    0

    Comment number 564.

    You

    Just now

    @530.Gotty

    "Crazy. It will price Royal Mail out of the market - far fewer items will be posted."

    It won't put RM out of business, but it will put a lot of posties / drivers on the dole queue.

    Price increase = less income = redundancies

  • rate this
    +1

    Comment number 563.

    Personally this sounds like another nail in the coffin to me.

  • rate this
    -2

    Comment number 562.

    Getting ready to sell it off and they government are making sure it looks sweet to buyers.

    Stuff the public, our great and glorious leaders need to make a few extra quid (seeing as they are about to let RBS go for a loss at tax payers expense)

    I wish my wages would go up 25%+ in one hit, for thar matter, I wish they had gone up 2.5% over the last 5 years!

 

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