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Last Updated: Thursday, 7 April, 2005, 05:35 GMT 06:35 UK
Price rise for first class stamps
First class stamps
First class stamps are now nine pence more than second class
The cost of posting a first class letter has risen by 2p and will now cost 30p, its first rise in two years.

Postage for heavier first class items will rise by between 5.2% to 9.5%, but second class postage will stay at 21p.

Business users who send franked or pre-paid first class mail will pay less, as part of new cost-based pricing unveiled by Royal Mail last year.

The firm said the changes would spread costs more fairly but Postwatch said it was still not meeting delivery targets.

Royal Mail said the price changes reflected the true cost of delivering mail. It says it is losing 5p on delivering first class stamped letters and 9p on second class letters.

It believes business users are unfairly subsidising smaller customers and will give bulk users 1p off first class post weighing up to 60 grams. Heavier items will get discounts of 3p to 8p.

"Customers should pay prices that are related to the cost of the postal services we are providing," Adam Crozier, Royal Mail chief executive, said last year.

The price changes are also being made ahead of postal liberalisation.

From 1 January, 2006, Royal Mail will lose its 350-year monopoly. Any licensed operator will be able to deliver mail to business and residential customers.

Other changes

The cost of Special Delivery, Royal Mail's next-day service has also risen to 3.85 from 3.75.

IN SUMMARY
First Class stamp will rise by 2p to 30p
Customers using franked and Printed Postage Impression (PPI) will pay 29p for first class mail up to 60g
Basic Second Class stamp will remain at 21p
International prices will rise between 5% and 6.9%
Special Delivery will rise from 3.75 to 3.85 for the basic service

A guaranteed 9am delivery will now cost 7.95, up from 6.95.

Royal Mail also announced increased charges for post sent overseas. International prices will rise between 5% and 6.9%.

For example, the cost of sending post weighing up to 20g from the UK to Europe will rise from 40p to 42p.

Price criticism

Consumer watchdog Postwatch criticised increased prices at a time when Royal Mail was not meeting its service delivery targets.

It said the 9p gap between the cost of first class and second class letters was "the biggest ever".

Last Christmas, however, Postwatch was urging people to use second-class mail as it said this was more reliable.

Overall, three out of 10 items posted first class failed to reach their destination the next day, against a target of less than one in 10.

However, nine out of 10 second class items beat their three-day target, its survey suggested.




BBC NEWS: VIDEO AND AUDIO
Royal Mail defends its plans for the change to prices



SEE ALSO:
Royal Mail pays 43m compensation
22 Mar 05 |  Business
Increased profits for Royal Mail
18 Nov 04 |  Business
Q&A: Royal Mail recovery
18 Nov 04 |  Business
Use second class, says Postwatch
29 Nov 04 |  Business
Royal Mail misses service targets
31 Aug 04 |  Business
First Class blues for Royal Mail
13 Aug 04 |  Business
Healthy mail staff offered prizes
05 Aug 04 |  Business


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