Stamp price rises to soar

Royal Mail has announced steep rises in the prices of stamps from 30 April 2012.

The price of a first class stamp for a standard letter will rise from 46p to 60p and the cost of a second class stamp for a standard letter will rise from 36p to 50p.

The announcement, on 27 March, followed a decision by Ofcom on a new regulatory framework for Royal Mail after Ofcom said Royal Mail’s financial position put the viability of its universal service – its obligation to deliver mail to every UK address every working day – at risk.

Royal Mail said the price increases were needed to put the universal service on a sound, sustainable and secure basis.

Moya Greene, Royal Mail chief executive officer, said: “We know how hard it is for households and businesses when our economy is as tough as it is now. No-one likes to raise prices in the current economic climate but, regretfully, we have no option.”

Royal Mail said that UK businesses that use meters benefited from discounts of up to 38 per cent on stamp prices and that even after the increases, first class prices for letters sent in this way would be around four per cent lower in real terms than in the early 1980s and second class prices around 13 per cent lower in real terms.

But Forum of Private Business chief executive Phil Orford said:  “This will merely prove to be yet another increase in the cost of doing business for SMEs.

"We will certainly be looking over the shoulder of Royal Mail to ensure they don't punish the wealth-creating businesses by above-inflation increases. The quickest way for the Royal Mail to decline further is by pricing businesses out of their service.

For low income households, Royal Mail will keep stamps for letters for Christmas 2012 at the same price as in 2011. Households on pension credit and employment and support allowance (or incapacity benefit) will be able to buy up to three books of 12 stamps – 36 stamps in total – from any Post Office branch from 6 November until the last posting dates before Christmas.

If you want more information then please contact accountants in Lichfield.   

Link: Royal Mail announcement