First class stamps will rise above £1 for the first time unless Saturday letter deliveries scrapped

The price of a first class stamp will see a ‘considerable’ increase if the postal service is to continue six-day deliveries, Royal Mail has warned. 

The cost of a first-class stamp rose by 10p to 95p in March, while a second-class stamp increased to 68p. A further increase could push the price of a first-class stamp above £1 for the first time. 

Chairman Keith Williams said fewer letters being sent means that it is costing more to deliver at the weekend. 

‘The cost to us is driven in part by [the fact that the] volume of letters has declined,’ Mr Williams said. 

The postal service is legally mandated to deliver post six days a week but regulator Ofcom has accepted evidence that 97 per cent would be happy to reduce service to five days

‘You’re delivering the same number of letters over six days when you could be doing it over five. So that is forcing up stamp prices.’ 

It comes after Grant Shapps told a select committee earlier this week that he would not allow Royal Mail to reduce the number of days it delivers on. 

The postal service is legally mandated to deliver post six days a week but regulator Ofcom has accepted evidence that 97 per cent would be happy to reduce service to five days. 

Postal workers have walked out in protest over pay and conditions. Grant Shapps told a House of Commons committee that he would not allow Royal Mail to reduce the number of days they deliver on

It has been struggling to modernise in order to compete with other delivery services, like Evri and Amazon. 

Mr Williams told The Telegraph that Royal Mail is allowed to generate a profit margin of between 5 percent and 10 percent under post-nationalisation regulations.

‘We’ve made that margin in two years since privatisation,’ Mr Williams added.

The Chairman said the postal service was ‘stuck’ between the government and the regulator as it failed to meet financial sustainability targets.  

The Royal Mail chief also said that Mr Shapps might be forced to allow the changes.  

The postal service has also been hit by strikes throughout December, which is typically its busiest period. 

Strikes have pushed up delivery costs for business across the country and some have limited their delivery options as a result. 

Mr Williams said Business Secretary Grant Shapps might be forced to accept the changes to weekly delivery days

Charges at John Lewis have gone up from £3.95 for a standard delivery for items of more than £50 to £4.50 since November. Argos has increased its charge for fast delivery by £1. 

Retailer Oliver Bonas has suspended their click and collect option, leaving Christmas shoppers fewer ways to order presents. 

A spokesperson for John Lewis said the retailer was working to keep its delivery costs as low as possible. 

An Argos spokesperson said their delivery costs were regularly monitored and that the company was committed to offering customers value.