First class stamp price to rise again to £1.35, says Royal Mail

The price of stamps will rise again on 2 April - the fourth increase in two years for the cost of sending a letter first class.

Royal Mail said the price of a first-class stamp would rise by 10p to £1.35 and second-class stamps would increase by 10p to 85p.

It comes after warning by the loss-making firm over the impact of higher costs and lower demand for letters.

On Monday, the BBC revealed the impact of problems with deliveries.

The cost of sending a letter second class from the second of April - 85p - will be the same as it cost to send one first class at the start of 2022.

Nick Landon, chief commercial officer at Royal Mail, said: "We always consider price changes very carefully, but we face a situation where letter volumes have reduced dramatically over recent years while costs have increased.

"It is no longer sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.

"As a result of letter volume decline, our posties now have to walk more than three times as far to deliver the same number of letters as before, increasing the delivery costs per letter."

The company said that adults typically spent less than £7 a year on stamped letters and people now received two letters a week on average. It said the cost of stamps remained below European averages.

Royal Mail, which made a loss of £419m last year, has long-argued prices had to rise due to the lack of reform of the one-price-goes-anywhere Universal Service Obligation (USO).

This requires the company to deliver letters to all 32 million UK addresses six days a week, Monday to Saturday.

But parcel deliveries have become more popular - and more profitable - for Royal Mail, which has been a private business for about a decade since it was split from the Post Office.

Change to the service now seems inevitable, with regulator Ofcom saying the postal service was "getting out of date" and action needed to be taken.

Under possible reforms, Royal Mail could reduce the number of days it delivers letters from six per week to five or even three, Ofcom said.

It estimated the company could save between £100m and £200m a year if delivery days were cut to five per week, and between £400m and £650m if there were just three postal days.

Another option would be to extend the number of days it takes for most letters to be delivered.

But ministers have said while they are happy for a debate reforms, the government is committed to keeping a six-day service.

Consumer groups criticised the latest price rises.

"Royal Mail is choosing to hike prices at a time when millions are left waiting for letters - vital medical appointments, legal documents and benefit decisions - all thanks to post delays. Nobody should be paying more for an unreliable service," said Morgan Wild of Citizens Advice.

"Ofcom should be holding Royal Mail to account, but it's letting the company get away with rocketing prices and nearly half a decade of missed delivery targets. Enough is enough, it's time for the regulator to act."

For more on the story of missed or late deliveries, watch Panorama on BBC iPlayer.

Reporter Zoe Conway speaks to Royal Mail insiders about problems facing the company and hears from its management about how proposed changes may help stave off multi-million-pound losses.