Royal mail annual price rise on 1st April 09  

Remember April 2010 will see further price hikes as Royal Mail seek to bolster profits to attract a potential buy out. The price for a large letter stamp in 2009 rose from 56p to 61p a massive 9% while inflation is at an historical low. For the last three years Royal Mail have increased the price of this service by between 8 and 9%. The standard first class stamp is now 39 pence, up from 36 pence, a rise of 8.5%. Special delivery up from £4.60 to £4.95, a rise of 7.6%.

UK VALID STAMPS

The following postage stamps are valid to use in the UK.

UK mint (unused) stamps in the following categories:

• Any stamp with the current monarch (that was dear Lizzie when I last looked) in denominations of  £1 or multiples. So all the way back to the coronation.
• Any stamp in decimal denominations.
• Any 1st or 2nd class stamps, regardless of original purchase price.
• Older stamps can often be purchased at discount from stamp dealers in job lots.
• Buying discount stamps in bulk packets can be useful if you send irregular sized parcels at different postage rates.

(If you sell stamps there is no VAT to pay as long as the stamps are unused and are sold at face value or less.)

In the long term, the best stamps to buy are 1st and 2nd class stamps as they do not have the price of the stamp written on them and will still be valid when the postal inreases come into effect. If you use a lot of stamps there are substantial savings to be made by buying these at cut price before the next inevitable price rises come in to effect.

Best supplier of new cut price stamps are Costco, 37p approx for 1st class (39p) standard letter (under 5mm thickness & 240 x 160 mm dimensions), and 57.5p approx for 1st class (61p) large letter.

Superdrug also has occasional promotions. Smaller resellers typically work on 5% profit margin and and any of these may decide to wave that margin in order to get feet through their door.

Here is an example of how the savings can mount up:

You have a special delivery next day parcel to send. It weighs under 100 grams and you need compensation level of up to £500 - current price at post office £4.95. Using 8 large letter stamps as above + 7p stamps bought from the usual source, you save 8 x 3.5p i.e. 27p. 

Had you purchased before the last price hike in March and stockpiled as I have been advising each year, your total saving would have been 8 x 8p (pre April Costco price 53p) a whacking 64 pence saving or 13%. You can't currently get rates like that in any bank or savings account over two years never mind in one day.

Franking accounts where you print your own stamps will give similar savings to the current discount stamp, but you have to pay for the account which will lessen the potential savings considerably. The humble stamp (purchased cut price of course and preferably just before the annual price rise) is still the most economical method.

THE CHANGES:

The current standard price for 1st class post (standard letter size) under 100 grams is 39p. In April 06 it was 32p, Royal Mail wanted to increase it to 39p but Postcomm would not allow that, although they have now achieved this, a rise of 22% in just 3 years. Royal Mail will continue to keep up the pressure for further price rises, as it seeks to bolster its attractiveness to potential buyers and to try and find funds for its pension scheme black hole. 

The postal market has been deregulated since January 06 when the 350 year monopoly of Royal Mail came to an end. It is now becoming clearer how this is affecting the average user and ebayer. They have now introduced three further inflation busting price rises, and we await the next in April 2010.

FOOTNOTE ON POSTAL ORDERS

Postal orders are a good way of receiving money as they can be treated like cash - no lengthy delays while cheques clear or bounce. They can be cashed at PO if not crossed, otherwise must be banked. For the buyer, sending a postal order should ensure they receive their goods promptly. They can also be cashed at post offices of 47 different British Commonwealth (past or present) countries around the world. What's more they can be purchased in some of these countries for example; Singapore, Malta, Trinidad and Tobago, and if you ever wanted to sell to Gambia but thought it was too dodgy, just say you will accept a sterling postal order. Our imperial legacy could have something going for it after all?

International money orders are a different matter and there will almost certainly be a charge to cash these. Typically about £10 in a UK bank. There are one or two cheaper alternatives for cashing these, e.g. auctionchex.

I hope you manage to add a few pennies to your wealth creation - or at least give less to 'Royal Snail'.

If you spot any mistakes please let me know. If you are reading this post April 2010, the maths above will not be correct but the principal will be.

Some other guides:

FREE POSTAL INSURANCE - POSTCOMM REGULATIONS

PAYPAL REVERSALS - SELLER BEWARE.

WELDED BLISS GUIDE TO GOLD - QUESTIONS AND ANSWERS.

British gold and silver charms.

DIAMOND GUIDE, 4 C'S AND CONFLICT DIAMONDS

Thanks, weldedblissauctions