Postage prices to rise

The price of a basic First Class stamp will remain unchanged at 28p. Basic Second Class postage will rise 1p to 21p.

First Class prices for heavier letters will fall but there will be increases for heavier Second Class mail. Parcels sent by Royal Mail will cost more, but there will be no change to Parcelforce Worldwide’s prices for express, time-guaranteed parcels. Most international prices will also rise from April 1.

The changes are in line with the formula announced last March by the postal regulator, Postcomm, setting a three-year control for Royal Mail’s prices.

Under Postcomm’s rules, Royal Mail prices overall must fit within an RPI-1% formula in the 2004/2005 financial year, which begins in April in the New Year. The average 1.2% rise means that Royal Mail’s range of prices will again not have kept pace with the Retail Prices Index, which was 2.5% in November, the most recent headline figure.

Royal Mail’s Chief Executive, Adam Crozier, said Royal Mail’s prices would firmly remain among the very lowest in the EU, where the average price of a First Class letter costs 36p — 8p more than the UK’s 28p basic First Class stamp price.

"The ability to send a letter via Royal Mail’s one-price-goes-anywhere service to the UK’s 27 million UK addresses remains fantastic value-for-money," said Mr Crozier.

"Even after the adjustments to our price have taken effect in April, the basic First Class stamp will be 4.7% lower in real terms compared to five years ago, while basic Second Class postage will have fallen 6.3% in real terms over the same period."

Mr Crozier added that the 1p rise in basic Second Class postage would help recoup some of the £257 million Royal Mail lost providing this category of mail in the last financial year.