Ofcom has announced it is proposing to extend the cap on the price of second class stamps for another year, keeping the cost flat in real terms until March 2028. The current cap, set in 2024 and pegged to inflation, expires in March.
Price cap extension proposed
The regulator said the price of sending a letter second class, currently 91p, will remain “flat” in real terms. Ofcom said it is proposing to extend the cap for a year while Royal Mail implements reforms to the universal service and improves its delivery performance, which it described as unacceptable in recent years.
“We plan to consult on our long-term approach to pricing next year, once Royal Mail has made more progress with delivering the significant changes and improvements that postal users expect, and we have a clearer picture of their impact,” said Ofcom.
Reforms and financial pressures
Ofcom added that under the regulator’s framework, the UK has a six-day, one-price-goes-anywhere postal service, with low stamp prices by international standards. With fewer letters being delivered, the cost to Royal Mail of delivering each letter has increased, and urgent reform was needed for the universal service to survive, it said.
Fergal Farragher, policy director at Ofcom, said: “To secure the long-term future of our postal service for consumers, we can’t look at affordability, sustainability or reliability in isolation. These are interconnected challenges that have to be considered together.
“The number of letters being sent is declining and Royal Mail’s financial position is stark, which is why we reformed its universal service obligations last year. But the company has been slow to implement this, which meant we weren’t able to consult on the future of stamp prices earlier this year, as originally planned.
“The company is now making some progress with its universal service reforms and improvements to its delivery performance, which has been unacceptable in recent years. However, we need a clearer picture of their impact before determining our long-term approach to stamp prices, which we’ll do next year.
“In the meantime, we’re proposing that second class stamp prices should stay flat in real terms for a further year, to make sure an affordable option remains available.”
