OFCOM.ORG:The price of a Second Class stamp will remain flat in real terms until March 2028, under proposals announced today by Ofcom.

[POSTMAN]

The price of a Second Class stamp will remain flat in real terms until March 2028, under proposals announced today by Ofcom.

We have previously set Second Class safeguard caps in 2012 and 2019. The current cap – set in 2024, which is pegged to inflation – expires in March 2027. We are proposing to extend this for one year while Royal Mail implements reforms to the universal service – following our changes to regulation in July 2025 – and improves its delivery performance, which has been unacceptable in recent years.

We plan to consult on our long-term approach to pricing next year, once Royal Mail has made more progress with delivering the significant changes and improvements that postal users expect, and we have a clearer picture of their impact.

https://www.ofcom.org.uk/post/deliverie ... =proposals

Ofcom is charged with ensuring that the universal postal service, delivered by Royal Mail, is sustainable and affordable.

Ofcom sets quality of service targets as part of the universal service and monitors performance against those targets, taking enforcement action against Royal Mail when its service quality falls below requirements. The substantial decline in letter volumes has reduced economies of scale in letter delivery. This has increased unit costs and weakened Royal Mail’s financial position, threatening the sustainability of the universal postal service. Royal Mail’s financial position means that there is some tension between the need for the universal service to be sustainable, ensuring it remains affordable and improving quality of service.

This document sets out Ofcom’s consultation proposals for the existing retail price cap on Second Class letters to be extended at its current level for one year, to 31 March 2028. This means the maximum price across the basket of these products would continue to rise no faster than inflation, as measured by CPI. We are proposing this approach while Royal Mail implements reforms to the delivery of the universal service (following our changes to regulation in July 2025) and its quality of service improvement plan, which together should have a significant impact on Royal Mail’s financial and service performance. These are crucial to establishing a sufficiently certain evidence base to determine the longer-term approach to pricing.

We have used the full extent of our powers to modernise Royal Mail’s regulatory obligations. This has enabled Royal Mail to respond to the continued decline in letter volumes and ensures that the universal service remains fit for purpose, recognising that the way people use the service has fundamentally changed. In January 2024, we set the current safeguard cap and began wider work on the future of the universal service and postal pricing. We introduced major reforms that gave Royal Mail greater flexibility in how it delivers Second Class letters. Those reforms came into effect on 28th July 2025.

Royal Mail started implementing the new operational model in June 2026, after it reached agreement with the Communication Workers Union (CWU) in April 2026. Royal Mail is now in the process of rolling out the new model across all its delivery offices and delivering its quality of service improvement plan. Those changes are expected to help improve Royal Mail’s costs, financial position and service performance, but the extent of their impacts remains unclear. Royal Mail needs to make more progress on these significant changes before we have a clear enough evidence base on which to determine our long-term approach. Therefore, we are proposing to continue our existing price cap on Second Class letters for one year, until March 2028, as a short-term solution.

Under our proposed approach we would extend the cap at its current level for one year, following its expiration in March 2027. We recognise the importance of setting the long-term approach given the pressures on the sustainability of the universal service. Therefore we plan to consult on a long-term approach to universal service and access pricing in Q1 2027/28 and issue a decision in Q3 2027/28. Our work would build on our 2025 Call for Input (CFI) on pricing and affordability and stakeholder input we received in response and subsequently.

It remains important that people have affordable access to the postal service. While we have consistently found that most people do not face affordability challenges to sending post; in 2023/24 the average household spent around £2.60 per month on postal services (this is equivalent to £0.60 per week), we also acknowledge that a small proportion of people may be more likely to face affordability issues, with those on lower incomes more likely to be vulnerable to increased postal prices. Therefore, we remain of the view that having more targeted approaches to affordability in place would have a significant impact on our approach to regulation and welcome Royal Mail’s continued consideration of a targeted discount scheme.

[POSTMAN]

https://www.internationaldistributionse ... arch-2028/

Royal mail responds to Ofcom’s proposal to extend the Second Class safeguard cap until March 2028.

Ofcom has today announced that it is proposing to extend the Second Class safeguard cap until March 2028.

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."

[qwerty2]

RM will just put up 1st class stamps even more