14% of postmasters set to lose out under new pay deal

Under the new Mails Distribution Agreement, one in seven UK postmasters will be getting smaller incomes from April 2022.

The new agreement, that was set to come into force in January next year but has been delayed by the pandemic, is a pay structure where postmasters will be paid a percentage of the value of products sold over the Post Office counter. Currently they receive a fixed fee.

According to the National Federation of Subpostmasters (NFSP) CEO Calum Greenhow, earnings for large letters and parcels are very close but from April those sending more parcels will earn more. 14% will lose out from this new arrangement.

“Naturally those who are losing out are understandably very concerned,” said Greenhow. 

“We’re working with the Post Office to protect those who could potentially lose out so that they’re able to protect their business.” 

Greenhow added: “What the Royal Mail was doing in essence was overpaying for the large letters, and underpaying for the parcels.

He said the new system would “make it fairer and make sure for parcels, people are getting paid appropriately.

“On that basis, they’ve got not only the ability to grow their business by selling more, but as the value increases, they’ll also get a greater percentage.

“It’s enabling things to move in line with inflation, whereas the old way didn’t.”

Post Office mails product portfolio director Mark Siviter said: “We have consulted with almost 8,000 postmasters on a one-to-one basis about what the new agreement with Royal Mail could mean for them.

“The vast majority will benefit, and overall postmasters will receive an estimated additional £10m worth of remuneration compared with the financial year 2020/21, consistent with market performance. With mails products and services alongside banking services making up the bulk of postmasters’ remuneration, we know just how important this is for postmasters.

“Over the summer we are working through consultation feedback and are providing further support to branches that could potentially see a bigger impact as result of our proposed changes, in advance of new rates coming into effect in April 2022.”

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