First class stamp price jumps to £1.25

The price of a first class stamp has risen to £1.25 from £1.10, the third increase in the space of 18 months.

Royal Mail blamed increasing cost pressures and the tough economic environment for the latest rise.

Charity Citizens Advice said that regulator Ofcom should hold the firm to account over "rocketing prices" while households struggle with rising costs.

But Ofcom said pricing "flexibility" was needed to ensure the postal service remained viable.

Royal Mail added that prices had to rise due to the lack of reform of the Universal Service Obligation (USO), which requires the company to deliver letters to all 32 million UK addresses six days a week.

The price of a second class stamp remains unchanged at 75p.

Matthew Upton, policy director at Citizens Advice, said Ofcom was "letting the company get away" with price rises despite its "poor service".

"Royal Mail holds a virtual monopoly on an essential public service that millions of people rely on, but despite missed delivery targets across the country this summer, Royal Mail has still chosen to hike prices," he said.

An Ofcom spokesperson said: "Ofcom caps the price of a second class stamp, to make sure an affordable option is always available, especially to support people on lower incomes.

"However, the postal market is rapidly evolving, as people send fewer letters and receive more parcels. So Royal Mail needs flexibility when setting first class stamp prices, to make sure the universal postal service can continue."

Royal Mail has long been seeking reform of the USO, arguing that it is unsustainable as the number of letters being sent is falling while the number of households is growing.

Letter volumes have fallen from 20 billion in 2004-05 to seven billion in 2022-23, the company says, while over the same period the number of addresses has risen by four million.

Royal Mail cites research by Ofcom in 2020 which suggested that a five-day-a-week, Monday-to-Friday letters service would meet the needs of 97% of consumers and small businesses.

In April 2022, the price of a first class stamp increased by 10p to 95p, and then in April this year the price went up to £1.10.

At the time, Nick Landon, Royal Mail's chief commercial officer said: "We understand the economic challenges that many of our customers are currently facing and have considered the price changes very carefully in light of the significant decline in letter volumes."

According to results from its parent company International Distributions Services (IDS), Royal Mail reported an operating loss of £419m in the year to March.

Last year strikes cost the company millions of pounds, as workers walked out 18 times as part of a long-running dispute over pay and conditions.

There were also widespread postal delays.

Royal Mail workers finally voted to accept a pay deal in July this year.