Royal Mail USO prices to rise annually by CPI to 2029

Category: News
Royal Mail USO prices to rise annually by CPI to 2029

The price to send letters second class will be pegged to inflation until at least 2029 so postal services remain affordable, under new proposals announced today by Ofcom. Currently the price cap was last set at 65p (actually 65.2p) in April 2019, but the price has been allowed to increase up to March 2024 by the Consumer Prices Index (CPI) rate of inflation.

Now the CPI inflation increase will apply through to 2029. With CPI having risen by 8.7% in the 12 months to May 2023, the current 75p second class stamp price is likely to jump to at least somewhere in the region of 81p-82p or higher when Royal Mail next set their prices.

The price of a second class stamp for letters up to 100g has an impact on all Royal Mail prices. It’s immediate impact is on the so called Basket cap – pricing for large letters and small and medium parcels up to 2kg which will also increase by CPI.

We might not be sending as many letters as we used to; but when we do, it can be an important way for family and friends to keep in touch.

So we’re proposing that stamp prices for second class letters should only rise by inflation, and no more, to make sure there’s always an affordable option available to everyone.

– Marina Gibbs, Director of Post, Ofcom

The knock on impact is that Royal Mail can then increase pricing for first class and parcel products, something the rest of the carrier industry will doubtless welcome as they too can then increase prices and remain competitive.

In truth, much as price increases are unwelcome to those operating in the ecommerce world, prices have been too low for some time, as evidenced by Tuffnells going bust. Carriers have always operated on tight margins but prices aren’t much higher with many carriers than a decade ago and that’s unrealistic.

Indeed, just today Parcelforce have announced a number of price adjustments are being made to Channel Islands (zone 4) and Asia East Coast (zone 13). There are also some country-specific price changes for South Korea. The price changes come into effect on the 10th of July and you can find the full rate card here.

Expect other carriers to nudge their prices upwards over the next year – with their costs increasing, as with every business, they are going to have to adjust their tariffs, probably at least in line with inflation.

One Response

  1. Are you kidding? Tuffnells was way overpriced, slow with poorly available tracking. They went under as they wouldn’t keep up with the times and provide proper tracking.

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