People receiving benefits may soon enjoy reduced prices for postage stamps as part of new proposals by Ofcom. The regulatory body aims to implement a discount program akin to existing social tariffs that provide cost-effective mobile and broadband services for benefit claimants. Over the past four years, the cost of first-class stamps has surged from 85p to £1.70, while second-class stamps have increased from 66p to 87p during the same timeframe.
Ofcom has initiated a review and is seeking public feedback until December 5, 2025, with plans to release a consultation in early 2026. Royal Mail is responsible for determining stamp prices in the United Kingdom. A spokesperson from Royal Mail expressed their commitment to collaborating with Ofcom on the review process, emphasizing the company’s efforts to maintain competitive pricing while managing the rising expenses associated with providing the Universal Service.
Recently, Royal Mail faced a £21 million penalty for failing to meet its annual delivery targets for first and second-class mail. Despite the imposed standards of 93% timely delivery for first-class mail and 98.5% for second-class mail, the company fell short by delivering only 77% of first-class mail and 92.5% of second-class mail on time in the 2024/25 fiscal year. This marked the third consecutive year of penalties for Royal Mail’s service shortcomings.
Ofcom has granted approval for Royal Mail to discontinue Saturday deliveries for second-class letters and transition to alternate weekday services, a change set to be implemented in the near future. However, under the universal service obligation, Royal Mail must maintain Monday to Saturday deliveries for first-class post and adhere to the three-day delivery target for second-class letters.
Martin Seidenberg, the CEO of International Distribution Services (IDS), acknowledged the significant operational challenges ahead, extending well into 2026. He underscored the company’s commitment to meticulous planning to ensure a seamless transition for customers. Royal Mail reported underlying earnings of £12 million for the year ending March 31, a notable improvement from the previous year’s losses of £336 million, although including redundancy costs resulted in underlying operating losses of £8 million.
In conclusion, Royal Mail faces a transformative period as it navigates regulatory changes, service enhancements, and financial adjustments to strengthen its position in the mail delivery sector.