From the 23rd of March 2020, the price of a 1st Class stamp will increase by 6p to 76p and the price of a 2nd Class stamp will increase by 4p to 65p, the maximum allowed under the Ofcom price cap.
These price increases are significantly more than the 3p rise for both a 1st Class Stamp and 2nd Class Stamp a year ago and are the biggest single increase since 2012.
A 1st Class Stamp for a 100g large letter will rise by 9p from £1.06 to £1.15 and the cost for a 2nd Class Stamp for a 100g large letter will rise by 5p from 83p to 88p.
Parcel prices are also being hiked, with a 1st class small parcel up to 1kg seeing a price rise from £3.55 to £3.70.
Royal Mail say that they understand many companies and households are finding it hard in the current economic environment and so considered any pricing changes very carefully and have sought to minimise any impact on customers. However they point to the fact they are expecting to make a loss in the 2020-21 financial year and say that the price hikes are are necessary to help ensure the sustainability of the one-price-goes-anywhere Universal Service.
Pointing to the potential loss and the ‘challenging business environment’, they add that they want to invest £1.8 billion in the UK to turnaround, grow and sustain the universal service. They add that the UK has one of the highest quality of service specifications of any major European country and say Royal Mail’s stamp prices are amongst the best value in Europe compared to other postal operators.
Royal Mail research shows that the European average for 1st Class letters (0-100g) is £1.05.
“We are operating in a tough market at present, under the threat of making a loss by 2021. These price increases will help us maintain the quality of service that is expected by our customers, while supporting the Universal Service.”
– Stephen Agar, Managing Director of Letters, Royal Mail