Royal Mail, which is now owned by International Distributions Services, has raised the prices of first and second-class stamps.
First-class stamps will increase by 15p to £1.10 while the price of a second-class stamp will rise 7p to 75p from 3 April 2023 to “ensure the one-price-goes anywhere” Universal Service remains sustainable, according to a statement.
Price rises have been implemented in the face of a 25% drop in letter volumes since the pandemic, increasing costs and inflation, it said.
Letter volumes have decreased from 20bn a year since 2004/05 to around 8bn per year now, while the number of addresses has risen by 4mln in the same period.
Royal Mail said that the prices are “competitive” in comparison to other major European postal operators, with the median price for a first-class letter (0-100g) £1.25.
Last April, the prices of a first-class stamp jumped 10p to 95p, and a second-class stamp moved to 68p from 66p.
Royal Mail last year said it requested the government to reduce the number of postal days from six to five in light of shifting consumer habits.
Royal Mail pitches for five-day service
Ofcom research quoted by Royal Mail, which has been plagued with industrial action over the last year, said that a five-day service would meet the needs of 97% of consumers and small-to-medium enterprises.
Continuing to provide a six-day service, that consumers have said they no longer need, “increases the threat to the sustainability of the Universal Service.”
“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,” said chief commercial officer Nick Landon.
However, Matthew Upton, director of policy at Citizens Advice said the price rises couldn't have come at a worse time for consumers and has urged Ofcom to take action.
“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," Upton said.
Royal Mail is currently expected to report an adjusted operating loss of £350mln to £450mln for the full year.