Royal Mail's Access Price Dispute: Two Fair Arguments, One Direction Of Travel

The dispute over Royal Mail's access prices pits a loss-making network against the customers who depend on it. Both sides are making an honest case, and the lasting answer lies elsewhere.

In July, Royal Mail told its wholesale customers that access prices would rise from 5 October by an average of around a quarter, with some business mail products rising by roughly a third.

It followed an increase of about nine per cent in January. For the organisations that collect, sort, and hand bulk mail to Royal Mail for final delivery, and for the banks, insurers, utilities, and NHS trusts they serve, that is a steep ask inside a single year.

The Mail Competition Forum, on behalf of 17 access customers, referred the increase to Ofcom. On 4 September Ofcom accepted the dispute, and under Royal Mail's own contract terms the rises were suspended while it considered whether they were fair and reasonable. Ofcom said it intended to decide within four months.

Update, October 2026: Royal Mail has since withdrawn CCN 129, and Ofcom closed the dispute on 5 October 2026 without making a determination. The analysis below was written while the dispute was open.

It is tempting to pick a side. I would caution against it, because both parties are making an honest case.

Royal Mail's Bind

Royal Mail is not raising prices out of opportunism.

Royal Mail says it has made losses of almost £800m over the last four years, while letter volumes continue their long structural decline.

The universal service still requires it to reach every one of the UK's 32 million addresses at a uniform price, and the cost of that network does not fall as neatly as the post it carries.

Access customers have long paid rates below equivalent consumer prices. Seen from Royal Mail's side, the notification it issued (CCN 129) is an overdue step towards a financially sustainable service, and Ofcom has itself repeatedly named that sustainability as a priority.

The Customers' Squeeze

The customers' case is just as real.

A rise of this size, compounding on January's, lands on organisations already working to tight margins, and it is ultimately passed to the end customer opening a statement or a regulated notice.

It arrives, too, against a backdrop of service performance that has frequently fallen short. Ofcom has fined Royal Mail more than £37m in recent years for missed delivery targets, and the regulator has not been oblique about it.

"Royal Mail's current performance is not acceptable. For several years, too many deliveries have been delayed, and this has had a serious impact on families, communities and businesses across all the nations and regions of the UK."

Ofcom, statement on the Business and Trade Committee's report, May 2026

Access operators are not resisting a fair price for a good service. They are questioning a steep price against an uncertain one. That is a legitimate question, and it is the one Ofcom has agreed to weigh.

What Ofcom Can, And Cannot, Settle

Here it helps to be precise about what the dispute could have resolved.

Ofcom does not directly regulate the prices Royal Mail charges access operators, and there is no absolute cap on them. Its principal safeguard is a margin squeeze control, meant to keep the gap between access and retail prices consistent with fair competition, rather than a ceiling on the increase itself.

The question before Ofcom was narrower than the headlines suggested. Because there is no cap to revert to, an outright strike-down was the least likely outcome. The realistic range ran from the increases being upheld, to a partial reduction, to a requirement that Royal Mail justify them more fully.

As it turned out, the immediate effect for customers was the lasting one. The rise did not take effect.

But even a favourable determination would only have treated a symptom, and so does the withdrawal. Neither changes the arithmetic beneath it, fewer letters carrying a larger share of a fixed network's cost.

That pressure returns next year, and the year after.

The Direction Both Sides Are Already Travelling

Which is why the more important shift is happening away from the negotiating table. The country has been moving to digital for years, and the regulator has now marked the path.

In Policy Statement PS25/13, the FCA amended its definition of a durable medium so that, for the retail disclosures in scope, electronic communication became the default from 12 January 2026, with paper available on request rather than as the starting point. It is a contained rule with a broad signal, and we have set out what it asks of firms in our durable medium guide.

For the highest-volume, most sensitive communications, statements, regulated correspondence, the notices people genuinely need to keep, that changes the calculation.

A statement delivered through a secure digital channel can be built to meet the standard the FCA sets for a durable medium: personally addressed, storable, and reproducible unchanged, with delivery and access that can be evidenced rather than assumed.

The commercial case moves in the same direction. On our own cost modelling, built with Project Rome's Professor Simon Pringle and our consultancy work with high-volume senders, businesses with high mail volumes can save up to 95% on print, pack, and post by switching to secure email, and the message reaches the customer in minutes rather than days.

We make Mailock, and comms outsourcers such as Paragon work with us to move their clients' most important communications into a secure digital channel, without asking the recipient to give up the record they are entitled to. Every statement that makes that move is one fewer item over which the price of a stamp has to be fought.

"The firms we work with are not waiting for the determination. They are going through their communications and asking which ones genuinely have to be paper, and moving the rest to a channel where access and delivery can be evidenced."

Adam Byford, COO, Beyond Encryption (Mailock)

That is the quiet resolution to a noisy dispute. Royal Mail needs fewer loss-making letters as much as its customers need lower bills, and the digital transition serves both.

The withdrawal ends this round, but not the pressure behind it. The rounds that follow will be won by whoever has already moved the mail that never needed to be paper.

FAQs

Did Ofcom Decide On Royal Mail's Access Price Rises?

No. Ofcom accepted the dispute on 4 September 2026, but Royal Mail withdrew CCN 129, and Ofcom closed the dispute on 5 October 2026 without a decision.

Are Royal Mail's October Access Price Increases Still Going Ahead?

No. Under the terms of Royal Mail's own contracts, the increases notified for 5 October were suspended while the dispute was open, and Royal Mail then withdrew CCN 129.

What Is CCN 129?

CCN 129 is the contract change notice Royal Mail issued on 23 July 2026 setting out the access price increases. Ofcom was asked to decide whether it constituted fair and reasonable terms, conditions and charges under access conditions USPA 3.1A and 3.1B. Royal Mail has since withdrawn it.

What Does The FCA's Durable Medium Change Mean For Post?

From 12 January 2026, for the retail disclosures in scope of PS25/13, electronic communication is the default and paper is provided on request. It does not ban paper, but it removes the assumption that paper is the starting point.

References

Ofcom accepts dispute regarding Royal Mail's wholesale price rises, Ofcom, 2026

Dispute between Mail Competition Forum and Royal Mail concerning notified price rises for access services, Ofcom, 2026

Statement on the Business and Trade Committee's report on the regulation of postal services, Ofcom, 2026

PS25/13: The MiFID Organisational Regulation, Financial Conduct Authority, 2025

A Nasty Case of Déjà Vu as Royal Mail Hikes Prices Again, Decision Marketing, 2026

Reviewed by

Sam Kendall, 16.10.26

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This content is for general information only and is not legal advice.