A proposed plan by Ofcom could lead to reduced stamp costs for individuals receiving benefits.
Ofcom is exploring the implementation of a new discount initiative, akin to existing social tariffs that provide discounted mobile and broadband services for benefit claimants.
Over the past four years, the price of first class stamps has surged from 85p to £1.70, while second class stamps have climbed from 66p to 87p during the same period.
Ofcom has initiated a review process, inviting public feedback until December 5, 2025, with plans to release a consultation in early 2026. Royal Mail holds the authority to set stamp prices in the UK.
A Royal Mail spokesperson stated, “We will collaborate closely with Ofcom on their review. We meticulously assess pricing to maintain affordability while managing the rising costs associated with providing the Universal Service.”
The enforcement action follows Royal Mail’s £21 million penalty for failing to meet annual delivery targets for first and second class mail services. The company is mandated to achieve 93% punctuality for first class and 98.5% for second class mail.
Despite this, performance in the 2024/25 fiscal year revealed a 77% on-time delivery rate for first class mail and 92.5% for second class, leading to consecutive fines over three years.
Ofcom has approved Royal Mail’s proposal to discontinue Saturday deliveries for second class letters, transitioning to alternate weekday services in the upcoming period.
Under the universal service obligation, Royal Mail must sustain Monday to Saturday deliveries for first-class post and uphold the three-day delivery target for second-class letters.
Royal Mail’s Chief Executive of International Distribution Services, Martin Seidenberg, acknowledged the substantial undertaking ahead, extending into 2026.
Seidenberg emphasized, “We are committed to meticulous planning to ensure customer satisfaction without wavering back and forth,” noting the prolonged timeline required for implementation.
In the financial year ending March 31, Royal Mail reported underlying earnings of £12 million, a significant improvement from the previous year’s £336 million losses when excluding voluntary redundancy costs.
However, factoring in redundancy expenses, Royal Mail still recorded underlying operating losses of £8 million, remaining in negative financial territory.
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