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Royal Mail fails to deliver on service as stamp prices rise

On the 23 March 2020 the cost of postage stamps goes up yet again. And it will be by a staggering amount too.

  • A first-class stamp for a standard letter will rise by 6p from 70p to 76p.
  • A second-class stamp for a standard letter will rise by 4p from 61p to 65p.
  • A first-class stamp for a large letter will rise by 9p from £1.06 to £1.15.
  • A second-class stamp for a large letter will rise by 5p from 83p to 88p.

The rise is vastly over the rate of inflation (currently 1.8%).

One wonders if Royal Mail would have put the price up even more had Ofcom not imposed a price cap? The 65p second-class stamp is the maximum possible under the current price cap.

red post box

Royal Mail said that the changes are necessary to help ensure the sustainability of the one-price-goes-anywhere Universal Service. But it says a similar thing every year and yet we don’t see any improvements in service! Perhaps, if they kept the price down, people would use the postal service more. And yet again, of course, it is the vulnerable who are the hardest hit as more of the elderly rely on snail mail rather than using email and couriers.

Stephen Agar, managing director of letters at Royal Mail, said: “We are operating in a tough market at present, under the threat of making a loss by 2021.” But why are they threatened with making a loss? Is it because they keep wasting money? I reported on the stamp price rise last year in Avoiding a right Royal Fail at the Royal Mail which talked about the poor service, lack of strategy and changes in service. Nothing much has changed since then. It appears that Royal Mail again needs to put up prices to cover repeated mistakes by its management.

I reported that there seemed little cohesion of national policy and procedure implementation. There is no strategic vision as different offices can operate in different ways. Really basic stuff! Making decisions which are quickly overturned over and over again such as posties being on foot, then their own cars, then trolley boxes, then bikes and then in pairs in vans. All this over just a few years. Ridiculous, and shows just how poor the leadership at Royal Mail is.

Royal Mail was privatised in 2013 and wants to be seen as working to keep costs down for consumers and making service improvements. But it needs to do a lot more work, listen to consumers and stop repeating mistakes and wasting money!

For anyone interested, here’s a table showing the effect of price increases over the last decade.

Cost of second class stamps             Cost of first class stamps 

Year cost % rise on previous year Year cost % rise on previous year
2009 30p 2009 39p
2010 32p 6.67% 2010 41p 5.13%
2011 36p 12.50% 2011 46p 12.20%
2012 50p 38.89% 2012 60p 30.43%
2013 50p 0% 2013 60p 0%
2014 53p 6% 2014 62p 3.33%
2015 54p 1.89% 2015 63p 1.61%
2016 55p 1.85% 2016 64p 1.58%
2017 56p 1.82% 2017 65p 1.56%
2018 58p 3.57% 2018 67p 3%
2019 61p 5.17% 2019 70p 4.47%
2020 65p 6.5% 2020 76p 8.5%

[ Full details of all price rises can be found on the Royal Mail website. ]




All you need to know when you have been refused credit

Credit refusal: know the score and take control

Guest post  by James Jones Experian’s Head of Consumer Affairs

See All you need to know about credit score rating for James’ previous post regarding , myths and how to up your credit score

Credit application refusal

Credit is an important source of additional funding which many of us will need for those large and often expensive projects, such as a house redecoration, a new kitchen or a new car. A credit application may be accepted or may be refused. This article is about what to do when credit is refused.

Credit refusal can be many things: frustrating, annoying, embarrassing, confusing, worrying – to name a few. But one thing it isn’t: uncommon.

Banks and other lenders decline thousands of credit applications every single day. And while access to credit isn’t a right – in that lenders are completely free to set their own criteria and to turn away customers who fail to meet them – you do have a right to be treated fairly.

What to do if your credit application is refused

So, if your credit application is turned down, you should expect the lender’s response to be helpful. For example, they should be able to explain the main reason your application fell short, giving you the opportunity to take action to improve your chances of success next time.

What you certainly want to avoid is panic and speculative applications to other lenders. If there’s a snag, such as a payment hiccup on your credit report you weren’t aware of, submitting multiple applications in the hope one lender will say “yes” is only likely to make matters worse.

If the lender isn’t upfront about the reason, go back and ask. If necessary, get the details of someone who can tell you and contact them. You might, for example, need to write to the head office. But it’s worth persevering because only the lender knows what the issue was and until you find out you’ll remain in the dark. If you’re using a financial adviser or broker then ask him/her to liaise with the lender to obtain the reason for refusal.

After you get the reason, you’ll be in a better position to work out your next move. And this can vary widely depending on issue – which is probably a good moment for us to quickly look at how lenders decide.

How a lender decides whether to give you credit

Most lenders look at three sources of information when assessing a credit application:

  • Your application form – including your job, salary, residential status and bank details
  • Their existing records – if you’ve been a customer of the lender in the past
  • Your credit report – how you’ve managed other credit in the last six years plus any other relevant records, such as county court judgments and past credit checks

Adding up the score

Most lenders will use a computerised scorecard to assess this information, in order to answer the following questions.

  1. What are the chances you’ll meet your repayments?
  2. Can you realistically afford them?

The answer to question 1. is your credit score, which is simply an expression of probability. If your score exceeds the lender’s pass-mark (and you can comfortably afford the repayments) then there’s a good chance of success.

However, alongside these scores, many lenders have policy rules that can individually determine the outcome of your application, irrespective of your score. Here are some examples of factors which lenders may use to set policy rules:

  • Unpaid default or county court judgment
  • Under 18 years old
  • Undischarged bankrupt
  • Income below £x

Action you can take if your credit application is rejected

As you can see from the above, there is a wide range of factors that lenders consider and it is certainly not just a question of whether your application meets the minimum credit score. This is exactly why you should always press the lender for the main reason they said “no”, to help you work out what to do next.

For example, if they tell you your application failed to reach the required credit score, you should ask the lender which credit reference agency (CRA) they used and take the opportunity to order a free copy of your credit report. Then, make sure everything on there is accurate and upto-date and, where available, review the CRA’s guide credit score to get their view on the health of your credit history. If there are no obvious problems, return to the lender with a copy of your credit report and ask them to look at your application again.

You might not know that, by law, if your application was refused solely because of an automated credit score, you can require the lender to review it manually, which means a human being will look over your application. This also gives you the opportunity to send in additional supporting information, including statements showing regular payments, such as council tax.

If the lender tells you the problem was affordability, then take the opportunity to review your spending. Cutting non-essential costs, such as unused gym memberships, or opting for supermarket own brands could help lift your finances into a healthier position and make you a better candidate for credit next time.

Whatever the reason, once you’re in the know you’ll be in a stronger position to either challenge the lender’s decision or improve your situation for the future. You should also consider using a credit-eligibility service, which can help you see which credit products you fit the criteria of before you apply, limiting the prospect of further setbacks.

For more guidance on troubleshooting a credit refusal, check out Experian’s credit refusal interactive guide.

About the author

James Jones

James Jones is Experian’s Head of Consumer Affairs and leads the company’s public education programme, advising people on, for example, credit reports, credit ratings and identity fraud. James is frequently on TV and radio, and regularly answers people’s questions through both traditional media and online via the Experian website, Facebook and Twitter. He began his career at Experian in 1992 after graduating from Cambridge. He loves travel, sport and real ale, and regularly combines all three by following Nottingham Forest and Nottinghamshire County Cricket Club.