The price of a first class stamp will rise by 10p to almost £1, Royal Mail has said.

Rising inflation and a long-term decline in letters has put pressure on costs, forcing the company to push through price increases even though it enjoyed bumper profits last year.

First class stamps will cost 95p from April 4. Second class stamps will also increase by 2p to 68p.

The changes mean the price of a first class stamp will have risen by 19p in two years. Royal Mail said it had considered these pricing changes “very carefully in light of the long-term structural decline in letter usage and rising inflation”.

Letter volumes have declined by more than 60 per cent since their peak in 2004/5, and around 20 per cent since the start of the pandemic. “Overall, these changes are broadly in line with inflation,” the company said.

Growing delivery demands

Nick Landon, chief commercial officer at Royal Mail said: “We understand that many companies and households are finding it hard in the current economic environment, and we will always keep our prices as affordable as possible.

“Whilst the number of letters our postmen and women deliver has declined from around 20 billion a year to around 7 billion since 2004/5, the number of addresses they have to deliver to has grown by around 3.5 million in the same period.”

Royal Mail said its stamp prices remain among the “best value in Europe”. The European average price for first class letters is £1.36.

Follows ‘video stamp’ announcement

It comes after the company announced plans to phase out traditional stamps and replace them with “digital-friendly” versions that display barcodes.

The inaugural “video stamp”, featuring an exclusive Aardman animation of Shaun the Sheep, goes on sale this month and Royal Mail hopes to phase out all older versions by the beginning of next year.

The new stamps allow senders to choose a video greeting that recipients can view when they receive an item of mail. Customers will be able to exchange current stamps for barcoded ones for free under Royal Mail’s new “Swap Out” scheme, which opens on March 31 2022.

Royal Mail said the initiative had allowed them to “connect the physical letter with the digital world”.

“We want people to continue to experience the pleasure of receiving letters and cards from loved ones, and will continue to work to ensure that stamps remain relevant to future generations,” it said.