Unfair Price Hikes: The Postal Service's Dilemma

The recent surge in first-class stamp prices has sparked widespread discontent, with more than two-thirds of people deeming the increases unfair. This sentiment is not unfounded, as the cost of a first-class stamp in the UK has more than doubled from 76p in 2020 to £1.70 in 2025, while in the US, the price has risen from $0.50 in 2019 to $0.73 in 2024. These hikes, driven by financial instability and operational inefficiencies, have significant implications for the affordability and accessibility of postal services, particularly for low-income households and older individuals.

The financial challenges faced by postal services like Royal Mail and USPS are well-documented. Royal Mail has failed to meet any annual delivery targets in the past five years, despite the significant price increases. Similarly, USPS continues to suffer financial losses, with an estimated loss of $6.5 billion in FY2023 and another $6.3 billion projected for FY2024. The Delivering for America Plan, introduced by Postmaster General Louis DeJoy, aims to achieve financial stability, improve postal service, and reorganize key networks. However, the plan has not been successful in addressing the financial challenges, as postal rates have increased a record six times since 2021, rising faster than inflation.

The impact of these price increases on affordability and accessibility is significant. In the UK, one in three people (33%) say they would struggle to afford a book of eight first-class stamps, now costing £13.60, and 16% said they would find it difficult to afford a single first-class stamp after the latest 5p rise. Similarly, in the US, the price of a first-class stamp increased from $0.68 to $0.73 on July 14, 2024, marking the sixth rate hike since 2021. This price increase has contributed to driving steep declines in mail volume, with annual volume since 2020 declining by 13 billion pieces, or 10%.

The affordability and accessibility of postal services are particularly important for low-income households and older individuals, who are more likely to be digitally excluded and rely on mail. As Tom MacInnes, director of policy at Citizens Advice, stated, "Royal Mail’s unfair price hikes are making post less affordable, and will hit low-income households and older people the hardest. People from these groups are more likely to be digitally excluded and rely on mail." This highlights the need for postal services to be affordable and accessible to all, regardless of their income or digital literacy.

The recent price hikes in first-class stamps have been significant and outpace historical trends. For instance, in the UK, the price of a first-class stamp has more than doubled from 76p in 2020 to £1.70 in 2025, an increase of over 123%. This is despite Royal Mail failing to meet any annual delivery targets in the past five years. Similarly, in the US, the price of a first-class stamp increased from $0.50 in 2019 to $0.73 in 2024, a 46% increase. This trend of rapid price increases is unsustainable and has several implications for the financial stability and operational efficiency of postal services.

Firstly, the rapid price increases have led to a decline in mail volume. In the US, mail volume has declined by 13 billion pieces, or 10%, since 2020. This decline in mail volume has contributed to financial losses for USPS, which lost $6.5 billion in FY2023 and is estimated to lose another $6.3 billion in FY2024. Similarly, in the UK, one in three people (33%) say they would struggle to afford a book of eight first-class stamps, now costing £13.60, and 16% said they would find it difficult to afford a single first-class stamp after the latest 5p rise. This suggests that the price increases are making post less affordable for many people, which could further reduce mail volume and exacerbate financial losses.

Secondly, the price increases have not been accompanied by improvements in service quality. In the US, just 83% of first-class mail was delivered on time in the beginning of 2024 compared to the DFA target of 95%. This is the lowest service level in 3 years. Similarly, in the UK, Royal Mail has failed to meet any annual delivery targets in the past five years. This suggests that the price increases are not being used to improve service quality, but rather to address financial challenges.

Thirdly, the price increases have led to a shift towards digital communication. In the UK, 32% of those polled had used a premium product, as opposed to a basic first or second-class stamp, to make sure an important letter or card arrived on time. This suggests that people are increasingly relying on digital communication for important messages, which could further reduce mail volume and exacerbate financial losses.



In conclusion, the recent price hikes in first-class stamps are outpacing historical trends and have several implications for the financial stability and operational efficiency of postal services. The price increases have led to a decline in mail volume, have not been accompanied by improvements in service quality, and have led to a shift towards digital communication. These trends suggest that postal services need to find new ways to generate revenue and improve service quality if they are to remain financially stable and operationally efficient.



The world must choose: cooperation or collapse. The postal service's dilemma is a microcosm of the broader challenges facing our society. As we grapple with the implications of rapid technological change and economic disruption, we must find ways to ensure that essential services remain affordable and accessible to all. The future of the postal service, and indeed our society, depends on it.