Blow to NHS as Royal Mail raises prices for bulk users by a third

Royal Mail will increase the price of its wholesale postal service by as much as a third, in a multimillion-pound blow to the NHS and other large organisations.

The postal company has warned customers who use its wholesale postal service for mail including marketing letters, household bills and medical appointment notices that it is raising prices by an average of 25% from 5 October.

The NHS spent at least £100m on sending letters by post in 2024, according to previous reports, meaning a 25% price increase could result in several million pounds of additional cost.

The tariff increases will affect Royal Mail’s bulk mail customers such as UK Mail, Whistl and Citipost, which specialise in sorting and processing mail on behalf of big businesses such as banks and organisations including the NHS and HMRC.

Royal Mail is responsible for the final mile of this mail, which accounts for most of the letters sent in the UK. However, as many companies turn to email or social media to reach their customers, letter volumes are declining, raising the cost of the service.

“We understand that any price increase is difficult, particularly in the current economic environment,” Royal Mail wrote in the letter, seen by the Guardian and signed by Richard Travers, the managing director for letters in the company’s wholesale business.

“The financial challenge of maintaining the UK’s nationwide postal network supported by 130,000 colleagues remains significant, and we are facing rising costs across our operation, including fuel and labour.”

The letter explains that price increases are “necessary to ensure prices more accurately reflect the cost of providing a reliable, nationwide postal service”.

The price increases come as Royal Mail, owned since April 2025 by the Czech billionaire Daniel Křetínský, continues to routinely fail to meet delivery targets set by the postal regulator.

Under most bulk mail contracts, the company is required to deliver the next day, although the postal service has regularly failed to meet targets for bulk mail and letters sent by consumers.

Ofcom launched a fresh investigation into Royal Mail in June after almost a quarter of first-class mail arrived late in the year to March. The regulator has fined the company £37m since 2023 over a failure to meet delivery targets. It will also look into allegations from whistleblowers and unions that Royal Mail is prioritising parcel delivery over letters, a practice the company denies.

The Mail Users’ Association, whose members include financial services companies and large mail producers, called the price increase “unprecedented” and said this would “place considerable additional financial pressure on organisations that rely on mail to communicate with customers”.

The cost of sending a bulk mail letter weighing up to 100g using Royal Mail’s access mail business economy service – for less urgent mail, to be delivered within five days – will increase by 36.1%, while the cost of sending a large letter weighing between 101g and 250g using the standard access advertising mail service will rise by 11.4%.

Royal Mail said access mail volumes have tumbled by almost a third so far this decade, sliding from 6.3bn items sent each year in 2019-20 to about 4.2bn items currently. The company said it has to deliver to a growing number of UK addresses, now totalling 32m. It added it had worked to reduce the impact of these changes on customers.

A Royal Mail spokesperson said: “These changes relate to our access business customers who will continue to benefit from lower prices than equivalent consumer rates.

“Royal Mail made losses of almost £800m over the last four years and the company finances remain below the level that Ofcom considers compatible with a financially sustainable universal service.”