Key facts
- Royal Mail will increase wholesale postal service prices by an average of 25% from October 5.
- The price hike could cost the NHS several million pounds annually.
- Bulk mail customers, including banks and government organizations, will be affected.
- Royal Mail attributes the increase to rising operational costs and declining letter volumes.
- The company has incurred losses of nearly £800 million over the last four years.
Royal Mail is set to significantly increase the prices for its wholesale postal services, a move that will impact large organizations, including the NHS, by an average of 25% starting October 5. Some tariffs will rise by as much as 36.1%, placing a substantial financial burden on entities that rely on mail for communication, such as marketing letters, bills, and appointment notices.
The postal operator attributes the price hikes to the rising costs of maintaining its nationwide network, including fuel and labor expenses, alongside a significant decline in letter volumes. Royal Mail noted that access mail volumes have fallen by nearly a third since 2019-20, while the number of addresses it serves has grown to 32 million.
This decision comes amid ongoing scrutiny from the postal regulator, Ofcom, which has launched a fresh investigation into Royal Mail's delivery performance. The company has faced substantial fines for failing to meet delivery targets, and there are allegations of prioritizing parcel delivery over letters, which Royal Mail denies.
The Mail Users’ Association has characterized the price increase as 'unprecedented,' warning of considerable additional financial pressure on its members. Royal Mail has stated that these changes are necessary to ensure prices reflect the cost of providing a reliable service and to move towards financial sustainability, as the company has reported losses of nearly £800 million over the past four years.