Second Class letter prices could remain capped in real terms for another year under a proposal opened for consultation on 16 October. The proposed extension would run until 31 March 2028, giving Royal Mail more time to introduce changes to its delivery operation before a longer-term pricing decision is made.
The current safeguard cap, set in 2024, is due to expire in March 2027. Ofcom is proposing to continue it at its present level for one year. The cap is linked to inflation, so the proposal would limit increases to the rate of inflation rather than freeze the stamp price in pounds and pence. No final decision has been taken.
A temporary bridge while reforms take effect
The timing reflects the pace of changes to Royal Mail’s universal service. Regulatory reforms took effect in July 2025, giving the company greater flexibility in how it delivers Second Class letters. Royal Mail began implementing its revised operational model in June 2026 after reaching an agreement with its union in April.
The new model is still being rolled out across delivery offices, alongside a quality-of-service improvement plan. The scale of the changes’ effects on costs, finances and delivery performance is not yet clear. Ofcom’s proposal is therefore an interim measure: it would keep an inflation-linked limit in place while the regulator gathers a clearer picture of how the reforms are working.
The consultation document describes a difficult balance. Fewer letters are being delivered to each household on a round, reducing the economies of scale in the network and raising the cost of delivering each item. At the same time, the universal service must remain affordable and reliable. Ofcom is treating those aims as linked rather than deciding the price cap in isolation.
The universal service provides a six-day-a-week postal service with one price for delivery across the UK. The current safeguard applies to Second Class letter stamps only. Royal Mail remains free to set prices for its other products, which account for most of its revenue, and First Class pricing is not covered by this proposal.
What happens next
Responses to the consultation are due by 5pm on 27 November 2026. Ofcom plans to consider submissions before issuing a final decision in the fourth quarter of the 2026/27 financial year, ahead of the existing cap’s expiry. Until that decision is made, the proposed extension remains subject to change.
The regulator plans to consult on a longer-term approach to universal service and access pricing in the first quarter of 2027/28, with a decision expected in the third quarter of that financial year. That later review is intended to take account of progress on the operational reforms and evidence about their impact.
Affordability is also part of the longer-term debate. Ofcom’s consultation says most people do not face difficulty affording to send post, while acknowledging that a smaller group, particularly people on lower incomes, may be more exposed to price rises. It has said targeted assistance, such as a discount for vulnerable customers, could be relevant to future policy.
The existing Second Class safeguard cap is one element in a wider framework that also includes service standards and enforcement. Ofcom has previously fined Royal Mail over poor delivery performance and is investigating whether it met its latest annual targets for 2025/26. Royal Mail has committed to return performance to regulated targets by April 2027 and to invest £500 million over five years. Those are commitments, not completed results.
For now, the proposed one-year extension would preserve a limit on real-terms increases while the revised delivery model is put into practice. The consultation will determine whether that temporary approach becomes the regulator’s final decision; it does not settle how postal prices will be controlled beyond March 2028.
