LONDON (ShareCast) - (Sharecast News) - Britain's Royal Mail has been given permission to axe the Saturday delivery of second-class letters and lower reliability targets under new rules by industry regulator Ofcom.
Long-suffering customers left waiting for their post were also told that a "backstop" target had been drawn up to allow only 1% of mail to be more than two days late. The regulator said it could end up saving the service between £250m and £425m each year.

Targets have been lowered for first-class post to be delivered the next day to 90% from 93% and second-class within three days to 95% from 98.5%.

The changes, which take effect from July 28, follow hefty fines against Royal Mail for poor performance, with an investigation launched in May after it only delivered just over 75% of first-class post on time last year. Ofcom had already fined the company a combined £16m for missing its delivery targets in the past two years.

It also ruled that first-class letters would still have to be delivered by the next working day, Monday to Saturday, with a cap remaining on the price of a second-class stamp - currently 87p for a letter.

First-class stamps are an eye-watering £1.70 and Ofcom said it had also launched a review of the price of stamps amid concerns over affordability, with a consultation set to be launched next year.

The changes come after the Czech billionaire Daniel Křetínský's EP Group completed a £3.6bn takeover of Royal Mail owner International Distributions Services.

"These changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival," said Ofcom director for networks and communications, Natalie Black.

Reporting by Frank Prenesti for Sharecast.com

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