Stock-pile stamps now, Royal Mail customers told

[TrueBlueTerrier]

http://www.telegraph.co.uk/news/uknews/ ... -told.html" onclick="window.open(this.href);return false;

People should start stock-piling stamps now ahead of an expected steep price rise in April, the official consumer watchdog has said.

Consumer Focus said that given the scale of the increase “it would pay for customers to stock up now” on books of stamps.

Downing Street also put further pressure on Royal Mail over the proposed increase, insisting that any price rise had to be “affordable”.

It emerged yesterday that Royal Mail has asked its regulator Ofcom to increase second class stamps by 53 per cent from 36p to 55p - the biggest annual increase since 1975.

There would be no limit on the price of a first class stamp, which currently costs 46p. The rises could be pushed through as early as April.

Consumer Focus, the consumer champion which has a legal duty to monitor Royal Mail, said people would be wise “to stock up now” on stamps.

Robert Hammond, director of Postal Policy and Regulation at Consumer Focus, told The Daily Telegraph: “A fifty per cent price hike on second class stamps could see the difference in the cost of your post adding up over a year.

“Second-class stamps bought now will still be valid after the price changes come in.”

The increase would see a book of 12 second class stamps increase from £4.32 to £6.60 over night, as Royal Mail could push through the increase in one go. The price of stamps would then increase every year by inflation, under the proposals.

Books of first and second class stamps no longer detail the prices of the stamps, which would allow them to be used after the expected price rise.

Mr Hammond added: “As a pack of 12 second-class stamps would cost over £2 more if this increase comes in, it would pay for customers to stock-up now.” Every household spends 40p per week on post on average, which works out at around £21 every year.

A spokesman for Prime Minister David Cameron said: “Royal Mail provides a very important service for people and it is important that it remains affordable. Certainly the service needs to be sustainable, hence why decisions need to be made about pricing.”

A spokesman for the Department for Business, Innovation and Skills, which is trying to push through the privatisation of Royal Mail, added: “It is not the Government's role to tell people when to buy stamps.”

The take-up of mail services has been badly dented by the expansion of email, broadband internet and the widespread use of mobile phones over the past decade.

A Royal Mail spokesman said last night: “Stockpiling is an activity usually conducted by consumers if they expect a product to be in short supply or if any prospective price increases significantly impacts on its affordability. It is simply not the case that either situation applies to stamps.

“The UK has one of the most comprehensive and high quality postal services in the world. That service is offered for amongst the most competitive prices in Europe – the UK already has amongst the lowest average 2nd Class prices in the EU.

“As successive research studies have conclusively shown, there are no affordability issues with postal prices. The average household spend on post is modest at £21 a year and 20 times less than spend on telephone services, electric and gas.”

Last November, Royal Mail reported a surprise jump in bottom-line profits to £176million in the six months to 25 September, which included a £146million one-off profits from the sale of properties. The UK letters, parcels and international business lost £41million after modernisation costs.

Royal Mail said at the time: “Were it not for profits from its GLS parcels business – £58 million – and the Post Office Limited – £55 million – the group overall would have made a loss”.

[TeeferTiger]

Somebody put a story similar to this in our local paper a few years ago. I wrote back in (and got it published) basically saying that if you bought 10, you'd save yourself 30p (at the time), WOW!! And that I couldn't wait to be at that age where I had nothing better to worry about than the price of stamps.

[DGP1]

Of course competition was supposed to stop this, instead it's made the whole thing worse...............but can't say that to the right-wingers at the torygraph

[PhilthyPhil]

Is RM actually increasing prices this high? I thought 55p was the new cap that the regulator has set rather than the price RM are actually going to charge. At the same time the cap on first class has been removed completely, this doesn't mean a first class stamp is suddenly going to be £5 or something. It seems the media is assuming that maximum price is what will be charged.

[red1968]

The increase would see a book of 12 second class stamps increase from £4.32 to £6.60 over night.
Thats a saving of £2.28,if you buy now.

[Lounge Lizard]

"It emerged yesterday that Royal Mail has asked its regulator Ofcom to increase second class stamps by 53 per cent from 36p to 55p - the biggest annual increase since 1975." - I remember it well, second class up from 3½p to 5½p and first class up from 4½p to 7p, but inflation was running at a very high rate in 1975.

[fishtank]

Is RM actually increasing prices this high?

No that would be ridiculous.
As you say 55p is the cap that was agreed to keep second class and access to the network affordable if first class prices are brought in line with actual cost as in zonal pricing.
That way someone in a rural area can still use Royal Mail without taking out a second mortgage.
It's just a bit of nonsense journalism but RM won't argue as stockpiling stamps is good for business because a large percentage will end up "somewhere in the back of a drawer" and forgotten about.

[POSTMAN]

https://www.myroyalmail.com/mrm/appnews ... aspx?i=498" onclick="window.open(this.href);return false;

There has been widespread coverage in the national press about possible price rises on stamps.

No final decisions have been made on stamp prices.

Our prices are among the lowest in Europe. We offer good value for money.

[Lounge Lizard]

https://www.myroyalmail.com/mrm/appnews ... aspx?i=498

There has been widespread coverage in the national press about possible price rises on stamps.

No final decisions have been made on stamp prices.

Our prices are among the lowest in Europe. We offer good value for money.

This could all be good for Royal Mail, everyone has the idea they're going to increase by 19p to 55p, then it's good news in April when they only increase by 10p to 46p.

[fishtank]

Ofcom proposed the cap on second class.

1. A cap on Second Class stamps for standard letters

Ofcom proposes to put a price cap of between 45p and 55p on Second Class stamps for standard letters to protect vulnerable customers from significant price rises. The cap would be indexed in line with inflation.

What RM are arguing is that the cap is set at the high end.
They are not as far as i'm aware proposing to move it to this position immediately.
It would be stupid because you would immediately have to hike first class to a level that would differentiate the two services.
That would need to be around 75p for a first class stamp and that wouldn't fly.

[Lounge Lizard]

Ofcom proposed the cap on second class.

1. A cap on Second Class stamps for standard letters

Ofcom proposes to put a price cap of between 45p and 55p on Second Class stamps for standard letters to protect vulnerable customers from significant price rises. The cap would be indexed in line with inflation.

What RM are arguing is that the cap is set at the high end.
They are not as far as i'm aware proposing to move it to this position immediately.
It would be stupid because you would immediately have to hike first class to a level that would differentiate the two services.
That would need to be around 75p for a first class stamp and that wouldn't fly.

"you would immediately have to hike first class to a level that would differentiate the two services" - no, I suggest that Royal Mail would want the differential between first and second class to reduce until after a few years there's just a single class, which might be appropriate given the small volume of stamped mail posted these days.

[fishtank]

That's not what RM want LL.
They want a "council telly" version because it gives them the freedom to do what they want with the premium service without the inconvenience of having to justify the affordability of the service to Ofcom.
What you will find is that the service level you get for your "pleb stamp" will be downgraded to the point where you would be quicker training your own carrier pigeons.

[Lounge Lizard]

That's not what RM want LL.
They want a "council telly" version because it gives them the freedom to do what they want with the premium service without the inconvenience of having to justify the affordability of the service to Ofcom.
What you will find is that the service level you get for your "pleb stamp" will be downgraded to the point where you would be quicker training your own carrier pigeons.

I still think they want just one class of mail like before January 1969.
They will scrap second class because (1) there's less income from it but it still costs about the same to deliver as first class (2) second class is only a small proportion of stamped mail (3) no need to segregate first and second class, which isn't done anyway ahead of Christmas and (4) set an achievable target for delivering a given percentage of the single class of mail the next working day, within a couple of days or whatever.
Mark my words, it'll happen within a couple of years.

[TrueBlueTerrier]

There is a third option as well - I think its called the Goldilocks pricing.

Offer Special Delivery at £5 +

1st Class at say 65p

2nd Class at 55p

For normal mail Special Delivery is priced too high, 1st class is the Goldilocks and 2nd price is relatively expensive for the service offered. Royal Mail therefore hope with a pricing structure like this that they get 99% of people going for the "not to bad a price" option of 1st class.

To be honest they could go any of the 3 ways, its not like they have not kept us guessing before.

[Lounge Lizard]

There is a third option as well - I think its called the Goldilocks pricing.

Offer Special Delivery at £5 +

1st Class at say 65p

2nd Class at 55p

For normal mail Special Delivery is priced too high, 1st class is the Goldilocks and 2nd price is relatively expensive for the service offered. Royal Mail therefore hope with a pricing structure like this that they get 99% of people going for the "not to bad a price" option of 1st class.

To be honest they could go any of the 3 ways, its not like they have not kept us guessing before.

What you suggest, and is quite possible, is to continue just as we are now, but with both first and second class about 10p dearer.