ROYAL Mail second-class stamp prices could be frozen for another year as it battles “unacceptable” delivery delays.
Watchdog Ofcom wants to extend an inflation-linked price cap until March 2028 while the company gets to grips with reforms and improves its service.
But the proposal isn’t a freeze on the price customers pay.
Prices could still rise with inflation, meaning anyone posting letters could face further increases.
The proposed cap would keep prices flat “in real terms”, rather than lock them at 91p.
The existing cap, introduced in 2024, expires in March 2027.
Ofcom is proposing to keep it in place for another year to protect an affordable option for people sending post.
The move comes as the watchdog criticised Royal Mail’s delivery performance as “unacceptable in recent years”.
Fergal Farragher, policy director at Ofcom, said: “The number of letters being sent is declining and Royal Mail’s financial position is stark, which is why we reformed its universal service obligations last year.
“But the company has been slow to implement this, which meant we weren’t able to consult on the future of stamp prices earlier this year, as originally planned.”
He said the firm was now making progress, but the watchdog needed a clearer picture of whether the changes were working before deciding its long-term approach.
Ofcom plans to consult on the future of stamp pricing in 2027.
Mr Farragher said: “To secure the long-term future of our postal service for consumers, we can’t look at affordability, sustainability or reliability in isolation. These are interconnected challenges that have to be considered together.”
He added: “In the meantime, we’re proposing that second class stamp prices should stay flat in real terms for a further year, to make sure an affordable option remains available.”
A Royal Mail spokesperson said: “Ofcom’s announcement today recognises the substantial decline in letter volumes is threatening the sustainability of the universal postal service, frustratingly yet again it has delayed its decision on one of the key actions needed to address it.
“Letter volumes have declined by 70% since their peak, whilst addresses have grown by more than 4 million.
“This means that the cost of delivering every letter is increasing.
“At the same time, prices remain well below international comparisons at 91p for a second class stamp compared to an average £2.07 across Europe.
“We have proposed a stamp discount scheme that will better support 10 million low income customers, while helping to secure the future of the Universal Service for everyone across the UK.
“Quality of service is improving as we roll out our new Universal Service delivery model, and we remain on track with the Quality of Service Improvement Plan we set out in April.
“We will work constructively with Ofcom on options for ensuring Royal Mail has the pricing flexibility needed to ensure the UK’s postal service remains reliable, affordable and sustainable for the long term.”