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Blow to NHS as Royal Mail raises prices for bulk users by a third
Royal Mail is to raise wholesale postal prices by an average of 25%, with some tariffs rising by as much as a third, in a move that will hit the NHS and other large organisations that send high volumes of letters. The price increases, which take effect from 5 October, apply to bulk mail used for marketing letters, household bills and medical appointment notices, and come as the company, now owned by Czech billionaire Daniel Křetínský, continues to miss delivery targets set by regulator Ofcom.
The changes affect Royal Mail's wholesale customers, such as UK Mail, Whistl and Citipost, which sort and process mail for large organisations including banks, the NHS and HMRC. The NHS spent at least £100m on postage in 2024, meaning the increase could add several million pounds to its costs. Specific rises include a 36.1% increase for economy-service letters up to 100g and 11.4% for large advertising letters between 101g and 250g, while Ofcom has fined Royal Mail £37m since 2023 over missed delivery targets and launched a fresh investigation in June after nearly a quarter of first-class mail arrived late.
In short
- Royal Mail to raise bulk mail prices by an average of 25% from October
- NHS could face several million pounds in extra postage costs
- Comes amid ongoing Ofcom probes into missed delivery targets
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Royal Mail operates in a structurally declining market where digital alternatives continue displacing physical mail, compressing revenues whilst costs remain substantial. To remain financially viable and continue serving the entire country, including unprofitable rural areas, the company must adjust pricing to match its cost base. Wholesale price increases affect intermediary organisations with considerable scale and sophistication to manage such adjustments as part of standard business operations rather than directly burdening individual consumers. Without viable pricing, universal postal service becomes unsustainable.
The case against
Royal Mail is raising prices substantially—up to one-third for some services—whilst simultaneously failing its core obligation to deliver reliably, having missed Ofcom targets consistently and incurred £37 million in regulatory fines since 2023. This represents a collapse of public accountability: customers receive degraded service at higher cost, fundamentally incompatible with public service principles. The burden falls directly on financially strained public services like the NHS, meaning these increases reduce healthcare spending and other public goods. A monopoly provider with no meaningful competition should not be permitted to raise prices whilst its own performance deteriorates.
Explained simply
Royal Mail is the UK's main postal service, responsible for delivering most of the letters and parcels that arrive at British addresses. It also provides bulk postage services to large organisations that send millions of letters, including the NHS, banks and government agencies.
These organisations send appointment reminders, bills, bank statements and other correspondence that millions of people rely on. When Royal Mail's wholesale postage costs increase, it directly affects the expenses of these major institutions, which can ultimately impact the services they provide.
Royal Mail was recently taken over by Czech billionaire Daniel Křetínský. The company has also been under pressure from its regulator Ofcom for missing mail delivery deadlines, facing fines and investigations as a result.