Cost of stamps to increase by 14p
The cost of posting letters is to increase to record levels after the Royal Mail announced a 14p increase in the cost of first and second-class stamps to 60p and 50p.
The postal group warned that the universal service, under which post is delivered to any house in the UK for the same price, was in "peril" without higher stamp prices.
Chief executive Moya Greene said; "This is a very high-quality, cherished service, but it needs to be paid for. The increase will restore our finances and maintain the universal service. We had no alternative but to increase prices."
Ms Greene said research showed the average household spent 50p a week on stamps, so she believed there was no "affordability issue" with higher prices.
"We know how hard it is for households and businesses when our economy is as tough as it is now. No-one likes to raise prices in the current economic climate but, regretfully, we have no option.
"Royal Mail provides one of the highest-quality postal services in Europe for amongst the lowest prices for both consumers and business. That service is under threat from declining volume, e-substitution and ever-increasing competition."
The Government said the top priority was to protect the universal service, while a consumer group said the Royal Mail could not rely on pushing up prices to turn around its fortunes.
Prices will rise from the current 46p for first class and 36p for second class from April 30, while the cost of posting large letters will increase from 75p to 90p for first class and 58p to 69p for second class.
The increases followed a decision by regulator Ofcom to give Royal Mail the freedom to set its own prices. Royal Mail said that even after the increases, second-class stamps will still be the cheapest in Europe while first class will be the fifth lowest.
The Royal Mail also announced that millions of people on low incomes will be able to buy up to 36 stamps for Christmas at the current price. Around five million people on pension credit and employment and support allowance or incapacity benefit will be eligible for the Christmas scheme, offering them the chance to buy up to three books of 12 stamps at 2011 prices.