Royal Mail to Cut Saturday Deliveries, Save £425m Under Ofcom Rules

When Royal Mail announced on Jan 30 2025 that it will reshape its delivery model from July 28 2025, the UK postal landscape shifted dramatically. The overhaul, cleared by Ofcom, slashes Saturday drops for second‑class mail, trims next‑day performance targets and re‑tools the Universal Service Obligation that covers roughly 32 million addresses. Martin Seidenberg, group chief executive of International Distribution Services plc, hailed the decision as “good news for customers” and a step toward a financially sustainable service. The changes arrive just months after billionaire Daniel Křetínský’s EP Group snapped up the historic carrier for £3.6 billion, making the group the outright owner.

What the New Delivery Rules Entail

First‑class letters will still roll out six days a week, Monday through Saturday, but the next‑day delivery guarantee drops from 93.5 % to 90 %. Second‑class items move to an alternating weekday schedule – Monday/Wednesday/Friday one week, Tuesday/Thursday the next – and Saturday service disappears altogether. The target for those parcels shifts to a 95 % on‑time rate within three days, down from 98.5 %.

Parcel deliveries, which have become the growth engine for the post office, will now run a five‑day week, Monday to Friday. A new universal clause forces 99 % of all mail to arrive no more than two days late, a safeguard against prolonged delays despite the loosened performance metrics.

Financial Rationale and Projected Savings

Ofcom’s assessment pegs the reforms at a net saving of between £250 million and £425 million a year – the higher figure appearing consistently across its regulatory briefings. That translates to roughly $340‑$578 million, enough to cover the rising cost of fuel, technology upgrades and the lingering pension deficit that has haunted the service for decades.

Analysts at Warwick Business School note that the savings are essential for a company that, after the EP Group takeover, now faces a competitive landscape where rivals like Whistl operate outside the universal duty and can cherry‑pick the most profitable business mail. The new model, critics argue, essentially nudges Royal Mail toward becoming a “low‑cost parcel giant”, a phrase that echoes internal strategy documents reviewed by industry observers.

Industry Reaction and Union Concerns

The move has drawn a mixed chorus. While Seidenberg said, “The new framework lets us focus on reliability while keeping the universal service affordable,” the Communication Workers Union (CWU) fired off a warning.

Communication Workers Union General Secretary Dave Ward described the plan as “a tripartite attack on jobs,” citing internal memos that suggest a “underhand dismantling of the USO.” Union members fear that reduced delivery windows could trigger staff reductions, especially in regional sorting hubs.

Meanwhile, consumer groups are cautiously optimistic. Ofcom has mandated quarterly meetings with these bodies starting in August 2025, a promise that could keep the changes in check if public sentiment turns sour.

Impact on Customers and Small Businesses

For the everyday Brit, the biggest headline is the loss of Saturday delivery for second‑class mail. Small e‑commerce firms, which rely on that service for cost‑effective shipping, will need to re‑engineer their logistics. A survey by the British Retail Consortium found that 42 % of SMEs consider Saturday delivery a “critical differentiator” for same‑week orders.

On the flip side, the streamlined schedule may shave a few minutes off average delivery times for first‑class letters, as routes become less congested. The new two‑day‑late cap also means that extreme delays – the kind that make a customer wait weeks for a bill – should become rarer.

Stamp prices are also on the radar. Ofcom announced a forthcoming review of affordability and hinted at a public consultation next year, a response to growing complaints about recent stamp hikes.

Implementation Timeline and Future Outlook

• June 1 2025 – Staff retraining programmes kick off across 30 UK sites.
• July 1 2025 – Customer education campaign launches, featuring TV spots and online guides.
• July 28 2025 – Full transition to the new delivery schedule goes live.
• August 2025 onward – Quarterly consultation meetings with consumer bodies, as required by Ofcom.
• 2026 – Expected review of cost‑savings impact and potential tweaks to the USO.

Looking ahead, the question isn’t just whether the savings materialise, but how the postal service will balance cost‑cutting with the public expectation of a universal, reliable network. If the reforms deliver the promised £425 million cushion, Royal Mail could invest more heavily in AI‑driven sorting hubs and next‑generation parcel lockers – a vision that dovetails with EP Group’s ambition to turn the carrier into the “Amazon of Europe.” Yet the success of that ambition will hinge on how quickly the union, consumers and competitors adapt to a leaner, more digital‑first Royal Mail.