Royal Mail hikes price of first class and second class stamps by 3p from March

Price rises necessary to ensure a universal postal service can be maintained, Royal Mail said

Royal Mail is raising prices after struggling to meet its targets to slash costs, achieving just £100m of a forecast £230m last year (PA)

Royal Mail will hike the price of first class stamps by 3p to 70p from next month while second class will go up by 3p to 61p, the privatised postal company announced on Friday.

The increases will be introduced on 25 March and come on top of changes Royal Mail is making to its redirection service, announced earlier this year.

From next month, Royal Mail will charge for the number of customers who want their post redirected, rather than on a per-surname basis.

Price rises are necessary to ensure a universal postal service can be maintained, Royal Mail said.

The company added: “Royal Mail understands that many companies and households are finding it hard in the current economic environment.

“As a result, we have considered any pricing changes very carefully and in doing so have sought to minimise any impact on our customers.”

Royal Mail is raising prices after struggling to meet its targets to slash costs, achieving just £100m of a forecast £230m last year.

More than £1bn was wiped off the company’s value in October after it warned last year that falling letter volumes would hit profits.

The company’s half-year adjusted earnings fell by over a quarter and headline pre tax profits by more than half. Shares slumped again in january after another disappointing update.

It emerged last year that new chief executive Rico Back had received a £6m payment when he joined from General Logistics Systems, a Dutch firm that Royal Mail owns.

His total pay packet for this year could hit £2.7m while outgoing chief executive Moya Greene received a £900,000 payout.