House of Commons Library

Postal services

Published Friday, July 6, 2018

This note gives an overview of postal services in the UK. It discusses current regulation, market trends and consumer problems.

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Section 1 describes the key actors in the UK postal market and the relationships between them. This section also introduces key terms used to describe the UK postal market.

The UK postal market is dominated by Royal Mail which is both the largest operator and the ‘universal service provider’. Ofcom is the regulator of UK postal services and focuses much of its regulatory activity on Royal Mail as the universal service provider.

Section 2 tackles frequently asked questions regarding postal services, with a particular focus on issues that constituents may face.

Section 3 lays out the regulatory framework of UK postal services.

Section 4 sets out trends in the UK letters market. UK letter volumes have been in decline since the mid-2000s.

Section 5 describes trends in stamp prices.  Ofcom granted Royal Mail price flexibility over stamp prices in 2012. Soon after, the price of 1st class stamp rose substantially. A 1st class stamp is now 67p.

Section 6 sets out trends in the UK parcels market. The UK parcels market is currently going through a period of strong growth. This growth has coincided in increasing competition. Parcel surcharges in Scotland and Northern Ireland have caused consumer groups concern in recent years.

Section 7 explains the recent performance of Royal Mail. Royal Mail’s profits after tax have increased slightly over the last couple of years and were £454 million in 2017/18.

Royal Mail missed several of its targets in 2017/18, some by quite a margin. It commented that its performance had been "significantly impacted by a number of exceptional events". Ofcom are investigating.

Commons Briefing papers SN06763

Authors: Jennifer Brown; Lorna Booth; Lorraine Conway

Topics: Consumers, Postal services

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