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Investing.com -- Royal Mail has been fined £21 million by UK communications regulator Ofcom for failing to meet its delivery targets in the 2024/25 financial year.
The postal service delivered only 77% of First Class mail on time against a target of 93%, and 92.5% of Second Class mail on time against a target of 98.5%, according to Ofcom’s investigation.
This marks the third consecutive year Royal Mail has breached its regulatory obligations, following previous fines of £5.6 million in November 2023 and £10.5 million 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."
The regulator has demanded that Royal Mail urgently publish and implement a credible improvement plan. The company had previously aimed to achieve 85% for First Class mail and 97% for Second Class mail by March 2025, but failed to meet these targets.
Ofcom noted that it considered exceptional weather events in its assessment, including Storm Darragh in December 2024 and Storm Eowyn in January 2025, but still found Royal Mail’s performance inadequate.
The £21 million penalty, which will be passed to HM Treasury, includes a 30% reduction from the £30 million Ofcom would have imposed, reflecting Royal Mail’s admissions of liability and agreement to settle the case.
Royal Mail’s financial position has shown improvement, with the company returning to a profit of £12 million in 2024/25 after losses of £419 million in 2022/23 and £348 million in 2023/24.
In July, Ofcom implemented changes to Royal Mail’s obligations to put the service on a more sustainable footing and enable the company to invest in improving delivery performance. The regulator also set new enforceable targets requiring 99% of mail to be delivered no more than two days late.