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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Comments

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  • rate this
    +1

    Comment number 621.

    Only one way to setlle whether its too cheap or expensive - open the service up to competition like any other industry and see what others want to charge.

  • rate this
    +1

    Comment number 620.

    it may be rising but if you were to deliver a letter yourself - how far would you get on a 60p train ticket or 60p spent on petrol?

  • rate this
    +1

    Comment number 619.

    The average person sends maybe 2 or 3 letters a week the increase in cost is under 50p - what is the fuss about?

    Try getting an independent firm to deliver an item 500 miles away within 24 hrs for 60p

    As the Labour leader Jim Callaghan once said to the TUC "Firms have got to make a profit."

  • rate this
    -1

    Comment number 618.

    Sounds like a typical business death spiral to me

    falling demand --> loosing money --> put up prices --> falling demand --> loosing money etc

    My guess is that the Post Office will be in just the same position after these price increases. It needs modernisation and a realisation that it has lost its monopoly, so must compete for business in an efficient manner vs its rivals.

  • rate this
    0

    Comment number 617.

    It's still a fair price, when you consider the movement of the item from postbox to door.
    The P.O. does seem doomed though, but I try and help by ticking the Royal Mail box when having any parcels delivered.
    Slightly OT, does the postman deliver to anyone in the early morning any more? Mine always arrives well after noon.

  • rate this
    0

    Comment number 616.

    Why don't we stop giving people more reason to be on benefits? Unemployment is a problem yet, the unemployed get free dental care, free perscriptions, free gym memberships, free transport in some cases, free money, houses for next to nothing, and now lower postage for their christmas cards, there's no incentive to work in this country!

  • rate this
    +1

    Comment number 615.

    593. Notanothernutter

    It is bad enough that we have to pick up the risk on funding the penion scheme.
    ==============
    Did dave forget to mention the 28 billion he's taking from the pension funds?

  • rate this
    +2

    Comment number 614.

    Well, that means tearing up the Christmas card list. I hated writing them anyway!

  • rate this
    0

    Comment number 613.

    Ever considered the environmental cost of sending a letter? Hopefully the extra cost of stamps will encourage more businesses to send invoices, purchase orders and remittances electronically.

  • rate this
    +2

    Comment number 612.

    I hope this points out the unrealistic inflation figures claimed by HM Govt.

    May of us can remember "first class" post being tuppence halfpenny in pre-decimal currency, thats 1p in current prices. 2d for postcards.

    The post is a social service, the Govt should be encouraging its use, not fattening it up for sale to an asset stripping company (probably based outside the UK).

  • rate this
    +1

    Comment number 611.

    Very few things anger me more than Royal Mail - the service is appalling. I don't blame the postman who sometimes makes it to my street, their problems are systematic from the very core. The unreliability was a real threat to my business but thankfully we don't need it much anymore. Worst postal service in the Western World and most of the developing countries also have a more reliable service.

  • rate this
    +4

    Comment number 610.

    How much of this price hike could be avoided if Royal Mail were able to charge TNT what it actually costs them to deliver TNT's mail from the local delivery office to our houses?

    If they could charge what it actually costs them, they would be a lot more competitive, and would get a lot more business back, besides saving consumers a lot of money.

  • rate this
    +2

    Comment number 609.

    Without commenting on whether the new price represents value for money, I would say that it is slightly unusual to respond to a competitive market (and falling share of the market) by increasing prices. Won't this make it more likley for customers to consider the alternatives before posting a letter?

  • rate this
    +2

    Comment number 608.

    I for one like to receive a physical invoice / statement rather than an electronic one, and also prefer to post out physical invoices / statements / quotations. However, with this enormous price hike I will be making the switch to email sooner than previously planned.

  • rate this
    +3

    Comment number 607.

    No problem with the price rise itself - the price isn't unrealistic in today's market - so long as we get the service we pay for! 1st class often gets there no quicker than 2nd; to guarantee next day delivery I have to send recorded (about £1.27?), and post arrives mid pm or not at all, then en masse, suggesting stockpiling. Happy to pay for a service so long as that service is received!

  • rate this
    -1

    Comment number 606.

    574.langstroth
    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...
    ==
    Simple. Allow RM to charge the correct rate to the private carriers who cannot deliver to peoples doorstep.

  • rate this
    -3

    Comment number 605.

    Not unexepected.

    This price is realistic for this type of service and reflects the costs in most other countries that I have assessed.

    It may reduce the number of Christmas cards that are sent!

  • rate this
    +2

    Comment number 604.

    I love sending and receiving post, making people smile. I am a Postcrosser and send postcards across the globe. I also write to penfriends, carefully crafting a missive using fountain pen and paper. When was the last time you were excited to receive an email? Email communication is not the same, never will be.
    Royal Mail should be encouraging people to use the post, not put them off.

  • rate this
    +1

    Comment number 603.

    Used to be to cheap. Now it's to expensive.

  • rate this
    -3

    Comment number 602.

    Can't wait till the inefficient public sector is removed.

    It's not my fault you live in Lllanelli - that's a zone 4 tariff of £2.50 - take it or leave it - Sir.

 

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