Royal Mail Hit With Record Fine By Ofcom For Persistent Service Failures

Royal Mail has once again found itself in the regulatory spotlight after Ofcom handed the postal giant a hefty £21 million fine for persistently failing to meet delivery targets. The penalty, the largest Royal Mail has received to date and one of the most significant in Ofcom’s history, underscores the scale of customer discontent over consistent delays in both first and second class mail services.

For the financial year 202425, Royal Mail managed to deliver only 77 per cent of first class and 92.5 per cent of second class letters on time, well short of the required 93 per cent and 98.5 per cent benchmarks. Ofcom sharply criticised the company, asserting that millions of important letters were not arriving as promised and warning that customers were not receiving the service for which they had paid.

This latest fine follows earlier penalties of £5.6 million in 2023 and £10.5 million in 2024, marking the third consecutive year of regulatory censure for delivery performance. Ofcom has made it clear that patience is wearing thin, urging Royal Mail to urgently publish and deliver a credible improvement plan or risk further financial penalties. The regulator noted that previous promises of reform had failed to materialise, labelling them as “empty”.

The watchdog emphasised the harm suffered by consumers and the fact that Royal Mail has now missed its delivery targets for at least seven straight years. The fine itself was reduced from an original figure of £30 million in recognition of Royal Mail’s admissions of liability and willingness to settle. The funds collected will go to the Treasury.

Owned by International Distribution Services and controlled by Czech billionaire Daniel Kretinsky, Royal Mail has returned to profitability after significant losses in previous years. Ofcom’s recent relaxation of universal service requirements, particularly for second class deliveries now being permitted on alternate days, is part of a broader regulatory effort to modernise the postal sector and improve outcomes for customers.

Royal Mail acknowledged the decision, stating that investments in a new delivery model and operational changes are beginning to yield improvements in service. Initiatives such as enhanced staff recruitment and support for delivery offices have been highlighted as key drivers behind early signs of progress. Ofcom, however, remains watchful, insisting that only sustained improvement will prevent further penalties going forward.