The cost of sending a letter in the UK in 2027
Key Points
- Ofcom said UK stamp prices will likely need to rise over time.
- The Second Class stamp cap would stay in line with inflation until March 2028.
- A Second Class stamp costs 91p, about half the European median.
- Royal Mail’s delivery reforms face a new pause from the CWU.
- Ofcom wants a discount scheme for vulnerable customers.
Ofcom said on Friday (16 October) that UK stamp prices will likely need to rise over time, despite proposing a further year of price caps.
The regulator proposed extending its safeguard cap on Second Class stamps until 31 March 2028, which limits price increases to the rate of inflation as measured by CPI. Ofcom set the current cap in January 2024, and it is due to expire in March 2027.
The regulator said the long-term trend is likely to be for letter prices to increase to support the financial sustainability of the universal service, as they have in other countries.
“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,” said Fergal Farragher, Policy Director at Ofcom.
A Second Class stamp currently costs 91p, up from 66p in April 2021.
Ofcom said this is less than half the £2.07 average price of comparable stamps in Europe and about half the £1.81 median price.
The cap covers Second Class standard and large letters only, and Royal Mail remains free to set First Class prices.
Fewer letters but higher costs
The number of letters sent in the UK has halved from around 14 billion in 2011/12 to approximately 6.5 billion in 2024/25.
Over the same period, the number of addresses Royal Mail must deliver to has grown to more than 32 million.
Ofcom said delivering one letter to a house costs nearly the same as delivering five letters to the same house on the same round.
Royal Mail’s universal service business has only reached a 5% profit margin in two years since its privatisation in 2013, most recently in 2015/16.
Ofcom considers a 5% margin to be the level that indicates the service is financially sustainable in the long term.
Royal Mail told Ofcom that it wanted the Second Class price cap removed entirely, arguing that it put its ability to deliver a financially sustainable service at risk.
Ofcom rejected this, saying Royal Mail faces limited competition for letters and that its delivery performance remains well below target.
Delays to delivery reforms
Ofcom changed Royal Mail’s obligations in July 2025, allowing it to deliver Second Class letters on alternate weekdays and drop Saturday Second Class deliveries.
Royal Mail only started rolling out its new delivery model in June 2026, after it reached an agreement with the Communication Workers Union (CWU) in April.
The company expects the new model to save £300 million and plans to complete the national rollout before Christmas 2026.
The CWU announced a pause to further rollout on 9 October 2026, saying Royal Mail needed to agree a plan to fix problems at delivery offices that are not working.
Royal Mail has requested immediate negotiations with the union.
Ofcom said it needs to see how the reforms affect Royal Mail’s costs and service before setting its long-term approach to stamp prices.
Missed targets and fines
Royal Mail delivered 75.7% of First Class mail the next working day in 2025/26, against a target of 93%.
It delivered 90.2% of Second Class mail within three working days, against a target of 98.5%.
Ofcom has fined Royal Mail £5.6 million, £10.5 million and £21 million over the past three years, totalling more than £37 million.
The regulator is currently investigating whether Royal Mail should face a fourth consecutive fine for its 2025/26 performance.
Royal Mail has committed to invest £500 million over five years and return to its delivery targets by April 2027.
Discount scheme for vulnerable customers
The average UK household spent around £2.60 per month on postal services in 2023/24.
Households in the lowest income bracket spent 5.87% of their remaining income after essentials on post in 2023/24, up from 0.97% the year before.
Ofcom said it wants Royal Mail to introduce a targeted discount scheme for vulnerable customers as soon as possible.
The regulator said a working discount scheme could lead it to relax or remove the Second Class price cap in future.
Ofcom is accepting responses to its proposal until 27 November 2026 and plans to publish its final decision between January and March 2027.
It plans to consult on its long-term approach to stamp prices between April and June 2027, with a decision due between October and December 2027.
