/ Money

Royal Mail free to set its own stamp prices – yay or nay?

Stamps could soon see the most dramatic price rise in years. Ofcom has said Royal Mail should be able to set its own first-class stamp prices, but is it wrong to put such power in Royal Mail’s hands?

The new postal regulator Ofcom (previously Postcomm) is to begin an 11-week public consultation on what should be done with Royal Mail and its loss-making letters business.

If you’re a big letter sender, Ofcom’s proposals might make you wince, so brace yourself:

  • Royal Mail should have the freedom to set its own first-class stamp prices, with current caps removed.
  • The same freedom should also be allowed for large second-class deliveries, business mail and bulk mail.
  • A cap will be put in place for second-class stamps, but this could be between 45 and 55p – up from the current 36p.

There’s no doubt that Royal Mail’s losing money – people are sending fewer letters and this decline is speeding up, not slowing down. Therefore, Ofcom has argued that its proposals are necessary to ensure the survival of an affordable six-days-a-week universal service.

Are stamps worth the extra cost?

Still, since 2003 first-class stamp prices have grown by 70% and second-class by 90%. Can we really take an even heftier price rise? When we last talked about the issue, opinion was largely split. Susie70 said she was happy to pay more:

‘Although in this computer age I use the Royal Mail less and less, I still think it is a bargain.’

However, Snowdin didn’t think the service they were getting justified the increase:

‘I think it’s a big rise especially for people living outside cities where internet services can be patchy and slow.’

And that’s the crux of it. Many of us might be happy to pay more for a stamp, but if the service stays static – or even gets worse – are we really getting value for money? Our Royal Mail investigation this year found that we’re getting an inconsistent “third-class” service, such as other people’s post being dropped on your doormat.

Prices could keep on rising

Richard Lloyd, our executive director, had this to say about Ofcom’s proposals:

‘Many people tell Which? they find the postal service patchy or inconsistent and the pricing of postage confusing. Ofcom must explain how these proposals will maintain a universal service that is increasingly efficient whilst remaining affordable for consumers.

‘It is essential that these plans don’t result in a downward spiral, with more people put off sending letters, leading to even higher prices.’

And who’s to say that Royal Mail’s newly found power won’t see it burst out of control, greedily ramping up prices? You’d hope Ofcom would step in, but we’ve previously seen Royal Mail allowed to increase the cost of renting its PO Boxes by a staggering 170% in just two years.

Many of you were outraged by this PO Box price increase, so much so that some have told us that they have been forced to stop using the service. But perhaps that’s the price we have to pay to keep Royal Mail afloat?

Should Royal Mail be free to set its own stamp prices?

Nay (70%, 147 Votes)

Yay (28%, 60 Votes)

I don't buy stamps (2%, 4 Votes)

Total Voters: 211

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John Symons says:
21 October 2011

My biggest fear is the downward spriral one. Also if we all switch to second class for all mail, no doubt the cap will be removed


Until privatisation became a reality the Post Office’s prices were tightly controlled with the result it was always underfunded for providing an “universal service” and introducing modern technology etc.

Now, suddenly , with privatisation round the corner the controls are all removed and the private company will be able to get the money needed to run the service.

David Harrison says:
23 October 2011

Not strictly true. As a postman the money which is being invested does not make up for the years and years where no funding was available. All this price rise will mean is we can hopefully compete with the competition who have a much better infrastructure than we have

moaner says:
22 October 2011

over the past 4 years i have had about £100 of items and several letters that contained financial details go missing in the post. i have received other people’s mail with at least two lines of the address being completely different to mine. a friend of mine posted a camera from Japan and he tracked it all the way across the world to England. it was never seen again once it entered the British postal system and i still don’t think he has managed to trace it or recover the money. if there was a reliable and equally accessible alternative i think they would be in big trouble.


In contrast I have never had any problems with Royal Mail or Parcel Force deliveries, both receiving and sending items – possibly very dependant on locality.

David Harrison says:
23 October 2011

Have all the items that have been sent, been sent through Royal Mauil or one of the rivals. It seems some of the bashing Royal Mail gets should be directed at TNT, DHL etc

Jon Large says:
23 October 2011

I don’t think they should until there’s easier access for the general public to competitors services.


It is fair that Royal Mail be allowed to set it’s own prices with the proviso there are other competing independent companies providing the same service, then consumers can choose to vote with their feet if they wish to. Royal Mail has been operating at a loss for years.

Currently (March 2012), Royal Mail is a monopoly for letters, but not -strictly- for parcels. Although consumers can utilise DHL, Fed Ex, City Link, TNT, Lynx and others, the availability of other parcel carriers is not as convenient or as easy as services from the Post Office.

Royal Mail is made to carry TNT and other firms letters but at a loss. As soon as other (independent) letter carriers are brought onto the market and allowed to compete with all the others, including Royal Mail, there will be a variety of prices and service quality.

balmcake says:
23 October 2011

I have had lots of mail go missing with R.M even had people throw letters addressed to us over our fence obviously it had been delivered to them in error, we have had to call postman back to give him letters which had been put in our letterbox not even the correct address or same street, I have had important documents go missing and packets with items in ,and have even been penalised by a certain bank because documents went astray cost to me £15 I got intouch with R.M to complain but they didnt even respond, I would happily pay a little extra for a good service but R.M is far from good, they use postment where I live who do not speak much English so I imagine reading it would be difficult, we have often had to deliver other peoples mail which has been put in our letter box by mistake, and we have had mail delivered at 5pm when we used to get it before 7am its not good and the really need to get their act together.