Royal Mail to reduce second class post deliveries

Sara White, Editor, Business & Accountancy Daily. Croner-i

The frequency of second class mail delivery will be reduced in an effort to stem losses at Royal Mail as demand for letters drops, while changes to bulk mail will also hit delivery speed for businesses.

The post regulator, Ofcom, has confirmed that from 28 July, Royal Mail will deliver second class letters on alternate weekdays Monday to Friday, with delivery targets remaining at within three working days of collection.

The delivery dates will alternate over a two-week period. There will be no Saturday second class deliveries, but first class post will still be delivered six days a week.

As part of the changes, standard bulk business letters will move to a three-day delivery aim, aligned with second class.

Under the new plan, a letter posted second class on a Monday would be delivered on Thursday, while a Friday letter would arrive the following Wednesday.

In addition, first class delivery target for next day delivery will be reduced from 93% to 90%, so one in 10 letters may not arrive the next day. However, there will be new enforceable backstop targets so that 99% of mail has to be delivered no more than two days late.

Tina McKenzie, policy chair at the Federation of Small Businesses (FSB) said: ‘Small firms need a postal service they can trust. Digital communication has not replaced Royal Mail – in fact, almost two thirds of small businesses send letters at least once a month.

‘Many will be disappointed, though not surprised, by the confirmation of a reduced second-class service. This, combined with watering down arrival targets, chips away at the basic reliability small businesses need to function and get paid.

‘A quarter of small firms say that having second-class letters delivered within three days is one of the three most important aspects of Royal Mail’s letter services. They use the service to send smaller items – like jewellery that fits into padded envelopes – along with invoices and other essential paperwork.

‘What matters now is making second-class post something firms don’t have to chase, second-guess, or build workarounds for. These reforms must now deliver genuine improvements, rather than opening the door to the slow dismantling of affordable and accessible post.’

Since 2011, Royal Mail has had to deliver first and second class letters six days a week under the universal service obligation. But in that time, the number of letters sent every year has more than halved to 6.6bn items, while the price of a first class stamp is eyewatering.

With fewer letters being delivered, the cost of delivering each letter has increased, and in 2023/24, Royal Mail made a loss of £348m. But at the same time, prices have shot up with second class stamps costing 87p, while a first class stamp is now £1.70, double the price in 2022 when it was only 85p. Large letters, holding A4 documents for example, start at £3.15, first class, and £1.55 second class.

Natalie Black, Ofcom’s group director for networks and communications, said: ‘These changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival.

‘But changing Royal Mail’s obligations alone won’t guarantee a better service – the company now has to play its part and implement this effectively. We’ll be making sure Royal Mail is clear with its customers about what’s happening, and passes the benefits of these changes on to them.’

Royal Mail, which was privatised in 2013, was sold to EP Group by Canadian owned International Distribution Services in April this year.

Most letters sent (63%) are ‘bulk mail’ – the letters sent by large organisations such as banks, government departments, the NHS or local authorities. These letters are sent outside of the universal service.

As part of its service agreement,  Royal Mail has to provide access to its letters network to the private sector postal operators serving bulk mail business clients. This means it must deliver letters collected by these companies, using the same network to deliver both universal service mail and bulk mail.

With ever rising prices, Ofcom is planning a further consultation on pricing in 2026, but stressed that second class postage prices would continue to be capped.

Susannah Streeter, head of money and markets at Hargreaves Lansdown said: ‘Although the Monday to Saturday service will remain for first class letters, which means urgent correspondence will still get through, the adjustments will relieve the pressure to deliver and will help trim costs.

‘But inevitably, it has raised questions about how expensive stamp prices have become. They were increased partly to help maintain the universal six-day service, but now these changes have been made, it’s not surprising Ofcom is now looking closely at the affordability of using the post.’