Royal Mail will raise its wholesale postal prices by an average of 25% from 5 October 2026, according to a letter sent to bulk mail customers and signed by Richard Travers, a senior Royal Mail executive (The Guardian).

The rise is not the same across all services. One of the most commonly used options — covering standard letters delivered within five days — will go up by 36.1%. That service is heavily used by companies that handle large volumes of mail for the NHS, banks, and government departments.

To understand who is affected, it helps to know how the system works. Companies like UK Mail, Whistl, and Citipost collect and sort mail for big organisations, then hand it to Royal Mail to actually deliver. Royal Mail charges these companies wholesale rates for the final delivery step. Those companies' clients include the NHS, HMRC (the UK's tax authority), and major banks.

For the NHS alone, postal spending was at least £100 million in 2024. A 25% increase on that base would mean tens of millions of pounds in extra annual mail costs. The actual impact will depend on how each NHS trust uses different mail services and how much of the increase gets passed on.

The Mail Users' Association, which represents bulk mail customers, called the increase "unprecedented." That word matters because this sector is used to price going up a bit every year. A jump of this size is seen as well beyond the normal range.

The broader context here is that the UK's letters market has been under strain for years. Royal Mail is required by law to deliver to every address in the country at a uniform price, even though fewer people are sending letters and the costs of labour and transport keep rising. Royal Mail is also required to let rival companies use its delivery network for a fee. It is at that point — where rivals pay to use Royal Mail's network — that these cost pressures show up most directly in the bills.

For public services, the timing is awkward. NHS trusts are already under financial pressure and will need to find extra money for mail in a budget year that has already started. HMRC depends on the post for tax notifications and compliance letters. Banks use postal services for statements, card delivery, and regulatory communications, and will factor the increases into their costs — which can ultimately affect customers.

The 36.1% rise on the five-day delivery service is especially significant because that specific format — a standard letter delivered within five days — is exactly what the NHS uses for appointment letters, HMRC uses for tax coding notices, and banks use for customer mailings. In other words, the steepest price increase lands on the service most embedded in essential everyday correspondence.

The bulk mail operators — UK Mail, Whistl, and Citipost — will have to decide how much of the increase they absorb themselves and how much they pass on to clients like the NHS, HMRC, and banks. These companies run on thin profit margins, which means a substantial portion of the cost rise is likely to reach the end customers in their renegotiated rates.

In the longer run, a lasting jump in postal prices could speed up the shift toward digital alternatives. NHS trusts have already been moving toward electronic appointment systems and patient portals. HMRC has a digital-by-default strategy, and banks are increasingly digitising customer communications. A higher price tag for physical mail strengthens the case for going digital. What is uncertain is whether that shift can happen fast enough to offset the higher costs, especially for mail that regulations or accessibility rules still require to be sent on paper.

The way the announcement was made — through a private letter to wholesale customers rather than a public statement — is normal for this type of pricing change. But the effects go well beyond that commercial layer, reaching the public services and financial institutions that rely on the post every day.