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.^[1]

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.

A sustainable, affordable, reliable service

As the postal regulator, Ofcom must consider the sustainability, affordability and reliability of the universal service together. For the last 15 years we have supported this by imposing a safeguard cap on Second Class stamp prices while leaving Royal Mail with pricing flexibility for First Class, and imposing delivery standards that we enforce when they are not met.^[2]

Under our framework, the UK has a six-day, one-price-goes-anywhere postal service. We have low stamp prices by international standards, with the average UK household spending 60p per week on all postal services in 2023/24, representing 0.11% of total weekly expenditure.^[3]

However, with fewer letters being delivered to each house on a given round, the cost to Royal Mail of delivering each letter has increased and urgent reform was needed for the universal service to survive.

Last year, we used the full extent of our powers to modernise the obligations imposed on Royal Mail – to reflect what people need, put the service on a more sustainable footing, and enable the company to invest more in improving its delivery performance.

These rule changes came into effect in July 2025. However, Royal Mail only started implementing its new operational model in June 2026, after reaching an agreement with its union.^[4]

Shaping the future of stamp prices

Royal Mail needs to make more progress on implementing these significant changes before we have a clear enough evidence base on which to determine our long-term approach to stamp pricing. We are therefore proposing to continue our existing price cap on Second Class letters for one year, until March 2028.^[5]

Given the sustainability of the universal service continues to be threatened in the face of declining letter volumes, stamp prices may need to increase over time, as they have in other countries. Last year, we set out our early thinking on longer-term options, including the impact of a more targeted approach to affordability.

While we have consistently found that most people do not face affordability challenges when sending post, we know that a small proportion may be more likely to face affordability issues, with those on lower incomes more likely to be vulnerable to increased postal prices.

We therefore remain of the view that a more targeted approach to affordability could provide more help to those who face the greatest challenges in affording to send letters, such as a discount scheme for vulnerable customers.

Fergal Farragher, Policy Director at Ofcom, 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.

“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.

“The company is now making some progress with its universal service reforms and improvements to its delivery performance, which has been unacceptable in recent years. However, we need a clearer picture of their impact before determining our long-term approach to stamp prices, which we’ll do next year.

“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.”