smallbusiness.co.uk: Helping your business think big

On 21 August 2006, the Royal Mail is changing the way postage is priced to take into account size as well as weight under the new Pricing in Proportion (PiP) system and the campaign to educate businesses is underway.

Under PiP, mail will fit into one of three categories: letter, large letter and packet. Around 70 per cent of business mail will remain unaffected and of the remainder a proportion of the prices will actually reduce.

Even where prices are set to rise, in a number of instances the increased costs can be avoided. For example, flat A4 letters can simply be folded in half to fit into a standard C5 envelope. In addition, the maximum weight for letters will go from 60g to 100g, and the maximum weight of 2nd class mail rises from 750g to 1kg.

All franking machines in the UK will be able to cope with the changes, although some weigh scales may need replacing. If your franking machine uses a tariff rate chip to determine the correct postage, your manufacturer will contact you in good time to arrange for your chip to be updated. If you manually select the correct postage on your machine, you will need to refer to the new prices in the information you will receive from Royal Mail before August 2006.

Special Delivery and Recorded Delivery will not be affected by the new pricing system. The full range of prices is available at www.royalmail.com/pip along with a variety of other information on the changes.

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