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
    +1

    Comment number 661.

    627.
    Notanothernutter
    And we get to fund their pension fund deficit.
    ==================
    You forgot to mention the 28 billion pounds dave is taking from the pension fund AGAIN, I wonder why?

  • rate this
    +1

    Comment number 660.

    As a 21 year old, can I ask, who the hell sends things in the post anymore? I myself have never sent a letter, e-mails however are free and I use them every day.

  • rate this
    +3

    Comment number 659.

    Last week I posted a Small Packet via 1st Class to my mother. It arrived the next day. At the same time, my son-in-law posted a Letter, in the same city, to my mother. It arrived 4 days later.

    I don't mind paying for a service. Perhaps RM wouldn't mind providing a service?

  • rate this
    +2

    Comment number 658.

    Where are the assurances that with the extra money raised services will improve? Millions of items are lost by Royal Mail every year, and millions is paid out in compensation. Surely improving efficiency here and consequently increasing customer confidence is essential if you want people and businesses to swallow a 30% hike in costs and not look at alternatives?

  • rate this
    +2

    Comment number 657.

    As a user of the service in which service levels are routinely ignored, I will use electronic means whenever possible. Go on price yourself out of the market.

  • rate this
    +11

    Comment number 656.

    Headline should read, Ofcom help to prepare Royal Mail for sell off.

  • rate this
    +5

    Comment number 655.

    The argument that I couldn't deliver the post myself for 60p is a bit silly... by that reckoning any stamp that costs less than £60 (a tank of petrol) would be an 'ok' price for long distances. It's the % increase that has upset folks - wouldn't it have been better to have a standard 2p/yr rise over the last 20 yrs. The costs would still be the same now but the impact would be easier to manage.

  • rate this
    0

    Comment number 654.

    Personally i cannot see the problem here. It is a big increase, that's granted, but to get something from one side of the country to the other for 60p within 24 hours, it sounds pretty cheap to me. We've got to remember fuel is going up and up, those vans and aeroplanes are getting more expensive to run.

  • rate this
    +3

    Comment number 653.

    So now it will cost even more for my mail to go missing!

  • rate this
    0

    Comment number 652.

    What a rip off. It high time the postal industry was opened to competition and new companies allowed to have post boxes in the street and give the Post Office which is inefficient at the best of times, competition.

  • rate this
    +2

    Comment number 651.

    Is it time we had a choice of delivery agents for mail, even if it's only on a city wide or regional basis. I can see the argument for longer distance deliveries but when I only want to send a letter within the city or county it seems prohibitively steep.I used to send birthday, Easter and Christmas cards and postcards from the seaside. Not any more I'm afraid.

  • rate this
    +2

    Comment number 650.

    I really couldn't care less about the Saturday delivery as being part of the issue. Most of what I receive is junk and I can certainly wait until Monday for everything else. Its not going to be life changing for anyone to to be without mail on a Saturday. Even running a business I could probably manage with a delivery Monday, Wednesday & Friday.

    Just means we will use email more frequently.
    Rich

  • rate this
    +4

    Comment number 649.

    Driving away customers just before you privatise isn't a good way of selling a business, specialy when that business has such a poor reputation already!

  • rate this
    +4

    Comment number 648.

    Looks like carrying a book of First Class stamps is inviting a mugging from 30th April.

  • rate this
    +45

    Comment number 647.

    If it meant an end to all the un-addressed junk mail that the royal mail delivers, I would cheerfully pay £2 a stamp.

  • rate this
    +3

    Comment number 646.

    I do not use the post office any more.sent one item recorded delivery. Claimed through the right channels, Said they had never recieved my claim although it was sent recorded delivery and signed for in Plymouth.

  • rate this
    +2

    Comment number 645.

    589. m from birmingham

    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,
    --------------
    No, the extremely highly paid dynamic duo, Leighton and Crozier sorted all that nonsense out - that's why they got those whopping bonus payments.

  • rate this
    +2

    Comment number 644.

    This is what happens when you want a service to turn into a business and pay for itself. Our national selfishness is coming home to roost and we have no one to blame but ourselves for voting for it.

  • rate this
    +7

    Comment number 643.

    Of the 8600 items I have posted in the last 5 years, only 3 haven't turned up, and I suspect that at least two of those customers pretended they never received the item.

    The service RM provide is extraordinarily good when compared to other delivery agents.

    The key is for RM to charge enough to maintain universal service. Lose that and mail order business will be laying off workers everywhere.

  • rate this
    +3

    Comment number 642.

    I have paid thousands of business bills via Royal Mail and not once in ten years have my suppliers failed to receive the cheque. On the other hand when people send me cheques (allegedly) they quite often are lost in the post - go figure! Based on my use of the service it is absolutely superb and at 60p it still represents superb value for money.

 

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