Royal Mail is hiking the price of stamps from next month to cope with drop in letter volumes

The cost of a First Class stamp is set to rise by 15p to £1.10 and the price of a Second Class stamp will increase by 7p to 75p from 3 April 2023.

The Royal Mail has said the price hikes are to guarantee the sustainability of the postal service amidst a 25% decrease in letter volumes since the pandemic, rising costs, and the highest inflation rates seen in a generation

Letter volumes have declined significantly from more than 20 billion letters a year in 2004/5, to approximately eight billion letters per year now, while the number of addresses has risen by four million in the same period.

Royal Mail is currently expected to report an adjusted operating loss of £350 million to £450 million for the full year.

Last year, the company requested that the UK Government amend the Universal Service Obligation from six days a week to five for letters, which “Ofcom’s research shows would meet the needs of 97% of consumers and SMEs.”

“A five-day letter service (Monday to Friday) would help to increase the sustainability of the Universal Service.” Royal Mail has said.

Nick Landon, Chief Commercial Officer at Royal Mail, said: “We appreciate that many businesses and households are facing a challenging economic environment and we are committed to keeping our prices affordable.”

“Letters have declined by 25% compared to pre-pandemic. We have to carefully balance our pricing against a continued decline in letter volumes and the increasing costs of delivering letters six days a week to an ever-growing number of addresses across the country.”

He added: “We are seeing a fundamental change in consumer needs with a greater shift in demand from letters to parcels.”

“It is vital that the Universal Service adapts and stays both relevant and sustainable. We need to make these price changes to ensure we can continue to maintain and invest in the one-price-goes-anywhere Universal Service for years to come.”

Matthew Upton, Director of Policy at Citizens Advice, said: “These record-breaking prices couldn’t be coming at a worse time for consumers, who’ll now be paying 64% more for a 1st class stamp than five years ago.”

“Almost one in five people are already struggling with current prices for second class stamps.”

“Royal Mail is choosing to hike prices at a time when millions are missing important letters, thanks to post delays. Nobody should be paying more for this kind of subpar service.”

“Ofcom should be holding Royal Mail to account, but it’s letting the company get away with rocketing prices and over two years of missed delivery targets. Enough is enough, it’s time for the regulator to act.”