Ofcom review of Royal Mail could see stamp prices change for certain people

Benefit claimants could pay lower rates for stamps under new proposals being considered by Ofcom. The regulator is looking into a potential discount scheme similar to social tariffs that offer cheaper mobile and broadband plans for benefit recipients.

Over the past four years, the cost of a first-class stamp has soared from 85p to £1.70, while second-class stamps have risen from 66p to 87p. Amidst this, Ofcom initiated a review yesterday, inviting the public to share their views by December 5 2025, with plans to publish a consultation in the first quarter of 2026.

In a post, Ofcom said: "Our previous research suggests that most people do not experience significant detriment as a result of postal prices, although there is some evidence that some vulnerable customers do experience affordability challenges, especially those on low incomes. We therefore believe there is merit in exploring options in addition to the current safeguard cap in our next affordability review and we have set out our early thinking on this.

"For example, a targeted discount scheme for vulnerable customers could provide more help to those who face the greatest challenges in affording to send letters. This approach would be similar to a 'social tariff', such as the existing cheaper phone and broadband packages available for people claiming Universal Credit, Pension Credit or other benefits."

The responsibility of setting stamp prices in the UK lies with Royal Mail. A spokesman for Royal Mail told the Mirror: "We will fully engage with Ofcom on its review. Royal Mail carefully considers prices and seeks to keep them as low as possible while balancing the increasing costs associated with delivering the Universal Service.

"The delivery of mail involves a complex network of multiple modes of transport and around 80,000 posties to deliver a letter from the Scilly Isles to Shetland for just 87p."

The review's initiation follows the Royal Mail's receipt of a £21 million penalty for failing to meet its yearly standards for first and second-class postal deliveries. Royal Mail is required to deliver 93% of its first-class and 98.5% of its second-class mail punctually.

However, throughout the 2024/25 financial year, it managed to deliver just 77% of first-class mail and 92.5% of second-class mail on schedule, according to Ofcom's findings. This marks the third consecutive year that the British postal giant has faced penalties for failing to meet its service standards.

Ofcom has approved Royal Mail's proposal to eliminate Saturday deliveries for second-class letters and transition the service to alternate weekdays, with implementation expected in the coming months.

Nevertheless, under its universal service obligation, Royal Mail must maintain Monday to Saturday deliveries for first-class post and uphold the requirement for second-class letters to arrive within three working days.

International Distribution Services (IDS) chief executive Martin Seidenberg described it as a 'massive task ahead' that will extend well into 2026. He said: "We will take the time to get this right. We owe it to our customers that we are not flipping back and forth." He added the group had 'always said it would take many months'.

Royal Mail reported underlying earnings, excluding voluntary redundancy costs, of £12 million for the year ending March 31. This represents a significant improvement compared to the £336 million loss incurred the previous year.

However, when redundancy costs are factored in, Royal Mail still remains in the red with underlying operating losses of £8 million.