With the cost-of-living-crisis in the UK peaking in 2024/2025, discussions on keeping universal postal services affordable have been fueled. Ofcom announced, in their 2024 decision on safeguard price caps for Second Class universal services, their intention to use the three year price cap period “to engage with Royal Mail to consider alternative approaches to ensuring affordability – for example, a targeted discount scheme for vulnerable consumers”. Ofcom commissioned WIK-Consult in May 2025 to compile and discuss elements, underlying principles and parameters of possible targeted discount schemes in a study. The objective of this study is to provide background information to enable Ofcom to explore further the potential efficacy of such a measure in addressing affordability issues.
This study’s starting point was in-depth desk research into the application of targeted discount schemes in other sectors in the UK (sectors for water, energy, and telecommunications services) as well as postal discount schemes in other countries. More than 50 targeted discount schemes have been researched, including four postal schemes.
WIK-Consult analysed each discount scheme in terms of type of discount, level and services covered, as well as application procedures, sales channels, funding and take-up. For a potential discount scheme for postal services in the UK, design options for each of the elements were discussed from the perspective of users, the universal service provider Royal Mail and third parties.
The decision on the introduction of a discount scheme for postal services in the UK and its possible design is still pending and is currently being discussed by Ofcom by way of a consultation process. Our study provides background information for the consultation and has been published by Ofcom as part of it.
