People receiving benefits may soon enjoy reduced prices for postage stamps as part of new proposals under review by Ofcom. The regulatory body aims to implement a discount program akin to existing social tariffs that provide discounted rates for mobile and broadband services to benefit recipients.
Over the past four years, the cost 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, seeking public input until December 5, 2025, with plans to release a consultation in the first quarter of 2026. Royal Mail has the authority to set stamp prices in the UK.
In response to Ofcom’s review, a Royal Mail spokesperson stated they would collaborate fully and strive to maintain affordable prices while managing the escalating costs associated with providing universal mail services.
Royal Mail recently faced a £21 million penalty for failing to meet its annual targets for timely delivery of first and second-class mail. Despite the regulatory requirements of 93% on-time delivery for first-class and 98.5% for second-class mail, Royal Mail fell short by delivering only 77% and 92.5%, respectively, during the 2024/25 financial year. This marked the third consecutive year of fines for the company’s service shortcomings.
Ofcom has granted permission for Royal Mail to discontinue Saturday deliveries for second-class letters and transition to alternate weekday services. However, Royal Mail must uphold Monday to Saturday deliveries for first-class post and ensure second-class letters reach recipients within three working days as part of its universal service obligation.
The CEO of International Distribution Services (IDS), Martin Seidenberg, acknowledged the significant challenge ahead, extending into 2026, emphasizing the importance of a deliberate and customer-focused approach to the changes.
Financially, 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. Despite this progress, including redundancy costs, Royal Mail still recorded underlying operating losses of £8 million.
As the company navigates these operational and financial shifts, the focus remains on meeting service standards while adapting to evolving market demands and regulatory requirements.
