Royal Mail unveils £500m investment plan to improve delivery times

Royal Mail has pledged to meet new postal delivery targets by May next year as part of a £500 million investment after agreeing a plan to roll out changes to scrap second-class post on Saturdays.

The group said it would begin to phase in a new letter delivery model nationwide next month, subject to a consultation with union members, which will see it deliver second-class post every other weekday only.

It follows agreement with the Communication Workers Union (CWU) last week, bringing an end to a lengthy dispute over the second-class post overhaul.

Royal Mail said the changes and planned investment will see it improve first-class next-day delivery to around 85% within nine months of the reforms being brought in, before reaching the 90% target set by regulator Ofcom within a year.

The firm also vowed to deliver 93% of second-class letters in three days within the space of nine months, and hit the 95% target by May next year.

Regulator Ofcom said Royal Mail must now “get on and implement” its improvement plan.

Royal Mail – whose owner International Distribution Services was bought last year by Czech billionaire Daniel Kretinsky – was fined a record £21 million by Ofcom in October for missing targets after it delivered just 77% of first-class post and 92.5% of second-class post on time in 2024-25.

From April 1, Ofcom lowered the delivery targets for first-class post to be delivered the next day from 93% to 90% and second-class to be delivered within three days from 98.5% to 95%.

But Ofcom added a new “enforceable” backstop delivery target, so that 99% of mail has to be delivered no more than two days late.

Royal Mail said its £500 million investment in the service over the next five years included an agreement to allow around 6,000 part-time postal workers to increase their average weekly hours if needed as part of the second-class post reforms.

It will be funded by savings made from the changes to the Universal Service.

Alistair Cochrane, chief executive of Royal Mail, said: “We recognise our service hasn’t always been the standard our customers rightly expect and we’re determined to do better.

“The plan we’ve set out today shows how we’ll make a step change in performance across the UK, backed by £500 million of investment over the next five years.”

It comes after Ofcom said it had been pushing for a “credible plan for change, backed by investment”.

Natalie Black, Ofcom’s group director for infrastructure and connectivity, said: “Now that’s published, Royal Mail needs to get on and implement it.

“Their plan must deliver significant and continuous improvement, with performance getting back on track.”

Ofcom last year gave the green light to Royal Mail’s plans to scale back second-class letter deliveries, starting from July 28, while keeping the first-class and parcels service unchanged.

Royal Mail launched the changes across 35 delivery offices as a pilot, but wider expansion across its 1,200-strong network ground to a halt over the disagreement with the CWU.

The agreement reached last week, which is now being put to CWU members for a ballot, will see the Universal Service reforms extended to another 240 delivery offices initially, before being completed across the full network by December.

Dave Ward, general secretary of the CWU, said: “We welcome any serious proposal that seeks to reverse customer service failings at Royal Mail, but what really matters is what happens on the ground to make that change happen.

He said postal workers “need answers over whether the workforce will be properly resourced and retained, whether they will have a real say over how change is deployed, what manageable workloads look like, and how serious issues are fixed”.