Royal Mail has been fined £21 million by Ofcom after failing to meet its delivery targets for first and second-class post in the 2024/25 financial year.
The communications watchdog revealed that only 77% of first-class mail and 92.5% of second-class mail were delivered on time, falling short of the 93% and 98.5% targets respectively.
This marks the third significant fine imposed on Royal Mail in recent years for delivery delays, following penalties of £5.6 million in November 2023 and £10.5 million in December 2024.
Ofcom originally proposed a £30 million fine but reduced it by 30% due to Royal Mail's admission of its failings.
Ian Strawhorne, Ofcom's director of enforcement, emphasized the impact on consumers, stating that millions of important letters are arriving late and customers are not receiving the service they pay for.
The regulator criticized Royal Mail's improvement plan, which aimed to deliver 85% of first-class and 97% of second-class post on time, as ineffective and unfulfilled.
Ofcom warned that further fines are likely unless Royal Mail presents a credible plan to improve its service quality.
The investigation concluded that Royal Mail breached its obligations by failing to provide an acceptable level of service without justification.
The actions taken by the company to meet its targets were deemed insufficient and ineffective, causing harm to customers who rely on timely mail delivery for urgent medical appointments, legal documents, and benefit decisions.
Citizens Advice described Royal Mail's track record as "woeful" and expressed concern that fines might become just another operating cost rather than a motivator for improvement.
Under the universal service obligation, Royal Mail is legally required to deliver letters six days a week and parcels five days a week to every UK address.
Since July, some areas have experienced reduced second-class deliveries, receiving mail every other weekday and no deliveries on Saturdays, a change proposed by Ofcom earlier in the year.
In response to the fine, a Royal Mail spokesperson acknowledged the decision and stated the company will continue working to improve service quality.
They noted that reducing second-class deliveries in some areas has allowed for a step change in service quality and highlighted recent changes in recruitment, training, and support at delivery offices.
Royal Mail, which was acquired by Czech billionaire Daniel Kretinsky for over £5 billion last year, posted a profit in September after three years of losses.
The £21 million fine will be paid to the Treasury.
Ofcom's enforcement actions underscore the ongoing challenges faced by Royal Mail in meeting its service commitments and the regulator's commitment to holding the company accountable for service standards.