Stamp prices are set to rise yet again in the new year, with increases of up to 12% coming in.

Royal Mail announced that the cost of a first class stamp will increase by 9p to 85p, while a second class version will rise by 1p to 66p. The new prices come in on January 1, 2021, and come just weeks after Royal Mail revealed letter volumes have fallen 28% in the six months to September 27, compared with the previous 12 months.

The company said it had ‘considered any pricing changes very carefully’ due to the coronavirus crisis but said the rises were ‘necessary to help ensure the sustainability’ of the postal service.

In a statement, Royal Mail said: ‘The reduction in letter volumes has had a significant impact on the finances of the universal service which lost £180 million in the first half of the year.

‘This demonstrates the need for change in the universal service. We are working tirelessly to deliver the most comprehensive service we can in difficult circumstances as the coronavirus pandemic continues to impact our operation.’

Defending the price rises, the company added that the Covid-19 pandemic had cost it £85 million during the period, notably on protective equipment, covering absences, overtime and agency staff.

Nick Landon, chief commercial officer at Royal Mail, said: ‘Like other companies, 2020 has been a challenging year for Royal Mail.

‘Our people have worked tirelessly to keep the UK connected throughout the pandemic and associated restrictions.

‘These price increases will help us continue to deliver and sustain the Universal Service in challenging circumstances.’

Though online deliveries have increased since the pandemic began, many consumers now use other providers.

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