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Business

Royal Mail confirms increase in postage prices

Royal Mail as announced that the price of a First Class stamp will increase by 9p to 85p each from January 1st, after what it described as a “challenging year” for the organisation.

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The Royal Mail faced £85m in additional costs related to Covid-19 in 2020

Second Class stamps will also increase by 1p to 66p each, with the Royal Mail saying the prices rises were necessary to help ensure the sustainability of its one-price-goes-anywhere Universal Service.

The Universal Service Obligation requires Royal Mail to be able to deliver to 31m home and business addresses across the UK, but comes with high fixed costs.

The novel coronavirus (Covid-19) pandemic led to a 28% drop in letter volumes in 2020 and the Royal Mail says this had an impact on finances of the Universal Service, which lost £180m in the first half of the year.

The Royal Mail also faced £85m in additional costs related to Covid-19, such as protective equipment, elevated absences, overtime and agency staff, as well as the impact of necessary social distancing measures.

Nick Landon, chief commercial officer at Royal Mail, says: “Like other companies, 2020 has been a challenging year for Royal Mail. Our people have worked tirelessly to keep the UK connected throughout the pandemic and associated restrictions.

“These price increases will help us continue to deliver and sustain the Universal Service in challenging circumstances.”

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