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60p first-class stamps!? Royal Mail can set its own prices

Royal Mail is now free to set its own first-class stamp prices. The regulator Ofcom says this action is needed to save Royal Mail’s universal service, but does this have your seal of approval?

We’ll soon find out what Royal Mail’s new freedom will mean in practice. From 30 April the price of a first-class stamp will rise from 46p to 60p. That’s quite a jump, and a record annual rise.

The price of a second-class stamp will also go up, from 36p to 50p. Ofcom has set a cap for second-class stamps at 55p – meaning Royal Mail has packaged it a little bit lower. Plus, this limit could rise with inflation every year.

Sending a large letter will cost 90p (instead of 75p) to post first-class, and 69p (rather than 58p) to send second-class. Parcels and everything else will also go up in price.

Higher prices to save Royal Mail

So, with relaxed controls come higher prices. Moya Greene, Royal Mail chief exec, has said this is needed to protect Royal Mail’s countrywide service:

‘No-one likes to raise prices in the current economic climate but, regretfully, we have no option. Royal Mail provides one of the highest quality postal services in Europe for among the lowest prices.’

There’s no getting away from the fact that people are sending less mail, but the fear is that higher prices will further add to this trend. Ofcom says the average household only spends about the price of chocolate bar (50p) on post per week. And even though Royal Mail delivered 16 billion letters last year, it’s still a loss-making business (£120m lost in 2010-11).

Your Royal Mail views

On Twitter, Dan ‏(@danthegooner) told us he doesn’t think the service is up to scratch:

‘Different postman every day if/when they turn up and numerous “lost” parcels. Never send via Royal Mail if I can. Rather use a courier.’

However, Craig (@craigpberry) thinks the new prices are worth it:

‘60p is hardly expensive! This is a sensible move. Buy cheaper birthday cards if 14p is going to break the bank.’

Almost three quarters of those who voted in our Which? Convo poll said they were against Royal Mail being given the freedom to set its own prices. Commenter Jon Large explained why:

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

And Peter Millard thought higher prices would results in fewer people posting letters:

‘Surely, putting up the price of a shrinking service is only going to make the demand for the service even less? Does there not need to be a reduction in prices in order to attract customers?’

As for me, I do still enjoying receiving mail (as long as it’s not junk or bills) but I have had my fair share of bad Royal Mail experiences. The latest was being asked to pay £1.12 for a letter that had been underpaid by the sender – I coughed up the money and the letter arrived ripped in half inside an ‘apology’ bag. I’d have preferred if Royal Mail had left it at the depot.

Still, that’s one case in hundreds of perfectly and promptly delivered post – and maybe it’s worth paying Royal Mail 60p to deliver them?

Comments
JohnM says:
1 April 2012

60 pence seems expensive but comparison with the cost of similar postal services in earlier years shows it is not. In 1840 the Penny Post (i.e. one old penny) was about 0.00013 of the average annual wage but the new 60 p post will be about 0.000026 of the average annual wage. In 1940 the equivalent post was 2.5 old pence or about 0.000056 of the average annual wage. Forgetting for the moment the level of service we “enjoy” from the Royal Mail, in real terms the new postage rate will be about 20% of what it was in 1840 or about 66% of what it was in 1940. It seems that history suggests we should not complain about the price. Complaints about the service are a different matter though.

Let’s hope this price increase reduces the amount of printed correspondence that wastes paper unnecessarily. For example, online PDF documents should be used instead of printed bills and statements; bank transfers should be used instead of cheques; and e-mails should be used instead of letters. I’ll be happy when the only post I receive is packages and greetings cards. Everything else is a waste of paper.

If businesses wish to compete with thew Royal Mail they should have to compete on a level so that if UKMail wishes to deliver me a letter it should either come with a Royal Mail stamp, at the full rate, or they should deliver it themeselves. If the post man delivers a letter it should be have a Royal Mail stamp on it. If this was the case maybe we would have a lot fewer vans ruuning around. 30 years ago you had the Royal Mail letter van and maybre the Royal Mail Parcel van. Now we have dozens of them all adding to congestion and pollution, So now we have to pay large sums for wind farms etc to try and get our emissions down to the agreed EuroZone levels

A.Lockyer. says:
1 April 2012

I think royal mail will price themselves out of the letter delivery market.
E-mail is cheaper and quicker and the way forward.
The postbox on the corner of the street will soon be a thing of the past just like the telephone box which is disappearing from our streets.

I Don’t think the increase is bad. if Royal mail is to survive it needs to be able to raise enough money to do so. I think the Government have held them back and not let prices rise with inflation. If the post office can begin to make money and continue to provide the excellent service we have come to depend on we will all be the winners.

JohnRob says:
1 April 2012

I’m not employed by Royal Mail, neither are any of my family. I think that Royal Mail perform a great servicer for a reasonable fee. I have never had a letter lost in the post and I have had no complaints about letters not arriving on the day after posting. Yes, I can remember the days when a letter posted in the early morning would arrive in the afternoon post. However, those were the days when workers had lower real wages, fewer holidays and worse conditions. However, I do believe that the increased charges are designed to drive customers away from Royal Mail and make its “failure” an excuse for privatisation.

C.Reeve says:
1 April 2012

From april 30th I will be sending a lot more emails and a lot less postal mail I think the Royal mail is shooting itself in the foot and will end in sueside

jastan says:
1 April 2012

Privatisation has usually meant a price increase – it is inevitable. The wealth creation sector has to make a profit and a return to investors/shareholders, this comes from the customer who will have to pay to fund that return. I cannot see any company charging less than £1 to have someone deliver an item through your letter box. Maybe second class mail will have to be collected from a “local” depot rather than being delivered to your front door. So just watch the service to customers continue to deteriorate as ever increasing returns to shareholders becomes the driving force.

AR Wylde says:
2 April 2012

Given that Royal Mail is the only postal carrier which is obliged to provide a comprehensive service throughout the UK, should it not be entitled to levy a charge on its competitors who undercut its service by”cherry picking” the places to which they make deliveries?
The levy could be used to reduce the cost of the postage stamp and level what is currently an uneven playing field.

David B says:
3 April 2012

I think that come Christmas Royal mail willw get a shock when another carrier gets all the mail. This rise is lunacy.

Taking a fancy to some of the recent special stamp issues, not for collecting reasons but just because I thought they were magnificent stamp designs, I now find I have a large stock of impressive first and second class postage stamps which I use for sending letters abroad and to friends and non-commercial recipients. These stamps have an indefinite validity so, unintentionally, this has proved to be an excellent investment as the same money left in a building society account would have produced a negligible return and bought me very little on withdrawal. For once in my life I have found myself in the position of being indifferent to a price rise!

Ray says:
3 April 2012

Royalty is becoming more expensive, profiteering was at one time, not too long ago, a criminal offence.
The virtual Monopoly of the post office, pprimarily funded through our money as stakeholders has no say in the matter and has the Queen been consulted, never mid the stakeholders.

Ray

Geoffrey Kinder says:
4 April 2012

I rarely send letters – I prefer email, but at Christmas we send 150+ cards. The 39% increase in second class mail is too much. I’ll buy enough stamps at the current rate for this year but it’ll be email cards in 2013! Surely the rises will prove self-defeating.

bernard says:
4 April 2012

bye bye royal Mail

GWL says:
4 April 2012

I very, very rarely use first class post since my experience shows, and Royal Mail admits, that a large proportion of these items are not delivered on the next business day. The charge for second class is excessive also. The regulator does nothing for the consumer, but is funded by us,

We are ripped off by the financial institutions, the supermarkets, the utilities, the petrol companies, railways, buses, airlines – in fact all businesses, and now this government has joined the bandwagon. Can anyone think of a business or organisation which plays fair with the public?

But I suppose I am being unreasonable since we are assured that inflation is at a very low level.

Each time there is a price rise for 1st and 2nd class stamps I have bought a lot of them before the actual date of the price rise.I have done so again.I just hope that the stamps don’t outlive Royal Mail.

Celia says:
5 April 2012

The Government should rethink the deregulation of postal charges. The increase in charges will make it more expensive to keep in touch with grandchildren; even if the grandchildren are are computer literate, their grandparents might not be able to use the internet. Handwritten letters or cards are much more personal and convey love and caring attitudes. I thought the government supported family values.

Michael says:
9 April 2012

Since 1945 the price of a stamp has risen by a factor of 60. Even if wages per hour have risen at the same rate (which I doubt) this means they have made no productivity improvements in 60 years!

Paul Owen says:
10 April 2012

What a joke, as stated in some statistics the average household only spends the price of a bar of chocolate on postage a week. Yet again the small businesses and internet based businesses are going to feel the worse of this increase, many of which can’t currently make ends meet. Not only has there been a staggering increase but vat as well which most small businesses won’t be able to claim back, how is this going to help anyone, more small businesses lost = less post sent = more Royal Mail Jobs lost, very clever!!

irene says:
12 April 2012

are we going to get a better service, i think not! Within the last month i have had 3 incidents with royal mail. First one debit card lost, second one mail delivered to my address in Scotland when it was for N Ireland no similarities in address , ican understand it slipping through the automated system but can posties not read !!! and finally received xmas card last week delayed because of insuficiant air mail stamps posted from next town 3 miles away!!!! im not predjusted as my late husband was a postie as is my son