Royal Mail fined £21m by Ofcom for missing delivery targets

Royal Mail has been fined £21m after almost a quarter of first-class post arrived late, Ofcom has announced.

It is the third-largest fine the communications watchdog has ever issued and follows its investigation after Royal Mail missed its targets for both first and second-class post in 2024/25.

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.”

Royal Mail said it will “continue to work hard to deliver further sustained improvements to our quality of service”.

It delivered 77% of First Class mail and 92.5% of Second Class mail on time in the 2024/25 financial year, which was short of its 93% and 98.5% targets.

This is the third time it has been fined over delivery delays in recent years, with penalities of £5.6m in November 2023 and £10.5m in December 2024.

Ofcom said the fine would have been £30m, but it had reduced it by 30% to reflect Royal Mail’s admission of its failings.

The regulator warned fines were “likely to continue” unless the company urgently delivers “a credible improvement plan”.

Ofcom said Royal Mail published an improvement plan for last year, aimed at delivering 85% of first-class post on time and 97% of second-class post, but “this has not materialised”.

Mr Strawhorne said: “Royal Mail must rebuild consumers’ confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises.”

Ofcom’s investigation found the company “breached its obligations by failing to provide an acceptable level of service without justification”.

It said the actions taken by Royal Mail to try and reach its targets were “insufficient and ineffective”.

The fine, Ofcom said, reflected the “harm suffered by customers” as a result of Royal Mail’s poor service.

Citizens Advice said the postal service’s track record was “woeful” but that the fines may not push the company to do better.

“When these failures are just an ordinary part of doing business, Ofcom’s fine risks becoming another operating cost, doing little to encourage the company to improve its service,” Tom MacInnes, director of policy at Citizens Advice, said.

“Missed post has real life consequences, with people left waiting for urgent medical appointment letters, legal documents and benefit decisions.”

Under the universal service obligation (USO), Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK.

Since July, some areas only receive second-class letters every other weekday and not on Saturday, a change proposed by Ofcom earlier this year.

Responding to Ofcom, a Royal Mail spokesperson said: “We acknowledge the decision made by Ofcom today and we will continue to work hard to deliver further sustained improvements to our quality of service.”

The spokesperson said that the reduction of second-class deliveries in some areas enabled the company to “drive a step change in quality of service”.

Royal Mail has also made changes in recruitment and training and has provided more support in delivery offices, the spokesperson added.

The fine will be paid to the Treasury.

Royal Mail was bought by Czech billionaire Daniel Kretinsky for more than £5bn last year. It posted a profit in September, following three years of losses.