Royal Mail has been fined £21 million by the regulator Ofcom for failing to meet its first and second class delivery targets.
This is the third time Ofcom has found the company in breach of its regulatory obligations in recent years, following a fine of £5.6m in November 2023 and £10.5m in December 2024.
Ian Strawhorne, director of enforcement at Ofcom, said: “Millions of important letters are arriving late, and people aren’t getting what they pay for when they buy a stamp. These persistent failures are unacceptable, and customers expect and deserve better.
“Royal Mail must rebuild consumers’ confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises.
“We’ve told the company to publicly set out how it’s going to deliver this change, and we expect to start seeing meaningful progress soon. If this doesn’t happen, fines are likely to continue.”
Ofcom measures Royal Mail’s delivery performance against nationwide annual delivery targets, from April to March. For 2024/25, the company was required to deliver 93% of First Class mail within one working day of collection and 98.5% of Second Class mail within three working days.
If Royal Mail misses its annual targets, we can consider evidence of any exceptional circumstances beyond the company’s control – such as extreme weather – and whether it would have achieved its targets had those events not occurred.
Even after accounting for exceptional weather events, Royal Mail only delivered 77% of First Class mail on time and 92.5% of Second Class mail on time between April 2024 and March 2025.
Ofcom has therefore decided that the company breached its obligations by failing to provide an acceptable level of service without justification. It took insufficient and ineffective steps to try and prevent this failure, which is likely to have impacted millions of customers who did not get the service they paid for.
The £21m fine will be passed in full to the Treasury. This is the third largest fine Ofcom has ever imposed. It includes a 30% reduction from the £30m it would otherwise have imposed, reflecting Royal Mail’s admissions of liability and agreement to settle the case.
In deciding on the level of this fine, Ofcom has considered the harm suffered by customers as a result of Royal Mail’s poor service, and the fact that it has breached its obligations in three consecutive years.
Ofcom also has a duty to ensure the universal postal service is financially sustainable, so we have also considered Royal Mail’s overall financial position, including its profitability and cash flow.
As well as fining the company, Ofcom has been pressing Royal Mail regularly on what it is doing to turn things around. The company produced an improvement plan for 2024/25, aiming to achieve 85% for First Class mail and 97% for Second Class mail by March 2025. This would have amounted to significant improvement. However, this has not materialised.
Ofcom said this is unacceptable, and has told Royal Mail it must urgently publish and implement a credible plan that delivers significant and continuous improvement. Without this, Ofcom is likely to continue to see financial penalties as both necessary and appropriate.
In July, Ofcom also made changes to the obligations imposed on Royal Mail – to reflect what people need, put the service on a more sustainable footing, and enable the company to invest more in improving its delivery performance. It said Royal Mail must now play its part by implementing this effectively and improving its reliability.
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