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
    -5

    Comment number 601.

    Theres nothing the RM puts through my letterbox thats important. 75% of it goes straight in to the recycling and the rest could wait a few days before I need to see it. So, I'm suggesting that to save money and keep costs down, lets reduce my 6 deliveries a week to just 2. I'd be very happy with that.

  • rate this
    +1

    Comment number 600.

    This has just made the switchover to private carriers like FedEx and UPS economical, having been sat on the edge after the last increase. Byebye to mine, and many more peoples small packet business. This is great news for the private carriers and good luck to them.

  • rate this
    +3

    Comment number 599.

    I find it strange that Supermarkets make vast profits from cutting prices, not raising them.
    Hasn't the Royal Mail got enough brains to work that out ?

    This will death of Royal Mail in my mind.

  • rate this
    +3

    Comment number 598.

    This is British Rail all over again - business drops, company makes loss, company increases prices, business drops, company makes loss, company puts up prices, etc, etc, etc. Absolute Madness. Who on Earth is going to send Christmas cards from now on, when it costs 50p second class to send a 5p card? This is the beginning of the end of the Post Office.

  • rate this
    -2

    Comment number 597.

    The fools should have voted against the pension transfer then at least they would have had some chance of retaining some jobs. The pension money is not there anyway, it's not there for so many other people they keep telling us.

  • rate this
    +1

    Comment number 596.

    Doubtless all the people saying it''s good value, even at the increased price, are earning reasonable money & not counting every penny. Those suggesting the elderly start using email, obviously don't realise the tiight budget many pensioners are on .... and those saying comments to the effect of *I earn lots of money and don't have to worry* ... you deserve a Stamp of a very different kind!

  • rate this
    +3

    Comment number 595.

    Tory, New Labour and Coalition governments have all repeatedly sabotaged Royal Mail and tried to flog it off to their corporate friends with no regard to the excellent service it used to provide and tries to maintain despite all the damage done. The present group of spivs and speculators in Westminster have ordered this price increase to make this public service a softer target for privatisation.

  • rate this
    -32

    Comment number 594.

    Start charging for distance. Why pay the same to send mail in the same city as mail from Dover to Fife? The ‘universal service’ flat-rate is a rip-off. The cost of delivering mail in the same city is nothing compared to sending to the other end of the country - why should I subsidise other mail? Make people pay for the distance they need - then charge me 25p (not 60p) for local delivery!

  • rate this
    -4

    Comment number 593.

    This is nothing short of outrageous.

    The Royal Mail has failed to change itself, held back by poor management and even poorer unions. It should not be up to the tax payer or public to continually bail them out. It is bad enough that we have to pick up the risk on funding the penion scheme.

    This is rubbish.

  • rate this
    +7

    Comment number 592.

    "Royal Mail provides one of the highest quality postal services in Europe for among the lowest prices for both consumers and business." - a bizarre claim. 5 minutes of research online and I've discovered that the UK is now the joint 5th most expensive place to send a standard (1st class equivalent) letter in Europe. Behind Norway, Denmark and Finland and on par with Switzerland.

  • rate this
    -1

    Comment number 591.

    This increase will only reduce the amount of private usage - more e-mails and texts certainly. The service needs to improve in line with the cost, but will it? If the past is anything to go on it certainly will not!

  • rate this
    0

    Comment number 590.

    These price rises will only force even more post online and the volume will decline further and at amore rapid rate. Raising rising prices steeply will make the PO profitable long-term. This is purely a short-term action by the government so they can raise more money on the floatation. Taxpayers will suffer long-term.

  • rate this
    -5

    Comment number 589.

    So they repeatedly fail to sort out the ridiculously old fashioned & ineffective working practices within Royal Mail so they pass the additional cost on to us,
    They need to get into the 21st century. All this will do is make companies actively invest in paper free solutions & drive their volumes down even further. You can't live long being inefficient & expect your customers to pick up the bill.

  • rate this
    +2

    Comment number 588.

    On the whole Royal Mail does a great job and if this helps them compete & invest then it's good news. Local post offices and a reliable postman are worth paying a bit extra for.
    As usual I see some people can't help moaning - they should send in a letter of complaint...!

  • rate this
    0

    Comment number 587.

    Royal Mail need a fundamental revirew of their business model, letter mail will continue to fall as email takes over. The only sustainable model is delivery of physical product. All the stuff we buy from web shops. If its just information it can and should go electronically.

  • rate this
    +3

    Comment number 586.

    Its about time...RM has had to work with their hands tied by the regulator.
    For the price you pay for the service to get your letter from anywhere to anywhere is a good deal... try to get TNT or any of the others to take a letter from one end of the country to the other for 50/60p..... or to deliver or in the middle of nowhere. go on try it..... its more like 60p a mile!!!

  • rate this
    0

    Comment number 585.

    Simple. I won't send anymore mail. I will use e-mail. Lots of postmen out of work. Where ius the sense in it.

  • rate this
    +6

    Comment number 584.

    In 1840, the price of a stamp was a penny, when a daily working class wage was sixpence.

    Even though the price is going up, its still extraordinarily cheap, and we can use email where we can to reduce the actual number of letters we have to send.

    If the price rise helps ensure a universal service then it really is a small price worth paying.

  • rate this
    0

    Comment number 583.

    Wouldn't be so bad if their service levels were anywhere near what is claimed, or if they at least increased at the same speed as their rates do,

    But it seems service decreases as prices increase....

  • rate this
    +3

    Comment number 582.

    Whilst I understand the negativity about these increases, I don't see other companies offering to match the prices.

    Would the unhappy people please explain why delivering an item to a different part of the country for substantially less than a quid is expensive (fuel is £1.40 per litre and my car does 7 miles per litre).

 

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