Prices going up again – but not for second class stamps

Royal Mail has announced that it will be increasing the price of postage stamps in October, having already raised them once this year. In April 2024, the price of a first-class stamp went up from £1.10 to £1.35 and now, six months on they are raising the price again to £1.65.

This enormous 22% increase puts 30p on the cost of a first-class letter and is driven, we are told, by “very real and urgent” financial pressures. It total it makes the rise this year 55p, which is a 33% rise in the cost of sending a letter.

Whilst it makes sense to increase the price of your product or services when, as a business, you are faced with an imbalance between revenues and costs, in this instance it makes no sense. Economically, the price is not as elastic as they would like to think and this will inevitably lead to a decrease in first-class mail volumes and, ultimately, a further decline in mail volumes overall.

Add to this mix the fact that the price of a basic second class letter remains at 85p and it is clear that most rational people will simply switch to the ‘slower’ service.

The reality is that deliveries of second-class letters often arrive at the same time as first-class letters, or if not, then the next day. With the price of a second class stamp currently capped until 2029 it seems that Royal Mail are trying to prevent people from using their first class service. If this is the aim then it simply strengthens their claim to remove the universal obligation as letter volumes will fall even further than they currently have. Perhaps this is their strategy.

This is a huge shame, as there’s nothing quite like the joy of receiving a letter and in our house, we definitely get more than the average household total of four letters a week.

The good news in all this is that the price of a second-class stamp remains the same, so to make sure we don’t lose this vital service, buy stamps and use them sending people letters!