Starmer increases cost of first-class letters by 30p

First-class stamp price to rise to £1.65



Royal Mail has announced it will hike the price of first-class stamps by 30p due to "very real and urgent" financial challenges.

The increase, which will kick in from 7 October, will see the price of a first-class stamp rise to £1.65p, while second-class stamps will remain at 85p.

The company said it was facing pressure from declining letter volumes and rising business costs in maintaining the one-price-goes-anywhere universal service.

It has called for the service terms, under which it is legally obliged to deliver letters six days per week, Monday to Saturday, and parcels Monday to Friday, to be reformed.

"We always consider price increases very carefully. However, when letter volumes have declined by two-thirds since their peak, the cost of delivering each letter inevitably increases," said Nick Landon, chief commercial officer at Royal Mail.

"We are proud to deliver the Universal Service, but the financial cost is significant."

The decision to increase first-class stamp prices comes after the UK's postal regulator said on Thursday that the company could be allowed to end the delivery of second-class letters on Saturdays, as part of reforms being considered.

Ofcom has also said it is looking into whether to allow second-class deliveries to be made on alternate weekdays, which could help cut costs for Royal Mail.

Royal Mail has estimated that reforming second class services, plus changing its performance targets, could save the business £300m a year.

It had proposed axing second class mail on Saturdays as well alternate weekday deliveries - both of which options are now being examined by Ofcom.

However, reforming the postal service by cutting delivery days would require the government and parliament to change the current legislation.

Ofcom has said no final decision had been made on reforms. It aims to publish a consultation early next year and make a decision in the summer.