Postal Inflation since 1840

The price of sending a letter (August 2025) is £1.70 for a 1^st Class letter and 87p for a 2^nd Class.  

Let us compare what that means in terms of the cost of sending a letter today against that of our Victorian forebears. 

The cost of sending a letter on the 5 May 1840, after the introduction of the Universal Penny Post, was standardized at one old penny and the proof of this payment was confirmed by the application of a penny black stamp onto the letter. Before this date the postage cost depended on the weight of the letter and the distance travelled - it was expensive; London to Sheffield at that time was 10 old pennies¹. 

It is difficult to accurately compare these costs with modern day prices as there are a number of things that have to be take into account. The current method of calculating inflation uses an equation based on the Consumer Price Index (CPI). This is easy when the start and end dates both have known CPIs, for example £1 in 1975 will need to be £2.51 in 1985 in order to buy the same commodity. As 1840 doesn't have a CPI we would have to calculate a reasonable CPI for that date which is by no means straight forward as commodities, mortgages and other items in the basket of life are worth either relatively more or less or don't exist. 

To keep things simple I use the Bank of England's own inflation calculator² and this indicates that £1 in 1840 has a purchasing power equivalent to £88.27 today. One old penny (a 1/240^th of a pound) is 0.41p in today's money and has therefore a present day value of 37p. 

So the cost of sending a 2^nd class letter today is 87p and this compared to 37p in 1840 would suggest that postal inflation exceeds actual inflation. This is not surprising as the postal costs in 1840 were based on low wages, no social security and no pensions for the average postal worker. But nothing is straight forward, in 1840 the Universal Penny Post was set deliberately low so as to encourage more people to use the post for the first time, and as demand rose exponentially the Post Office's income rose rapidly with it. 

However, if we compare the postal cost before May 1840 for a letter sent from  London to Sheffield, costing 10 old pennies, this is now equivalent to £3.70 - so maybe there is a reasonable comparison to be made to the current postal charges? The use of sending letters through Royal Mail is currently declining so will the cost of sending a letter soon be comparable with pre-1840? 

¹ For those interested the pre-1840 London to Sheffield postage rate is shown in “A List of Post-Towns and Principal Places; with the Postage of a Single Letter to or from London, According to the Actual Routes of the Post” published in March 1830 by Francis Freeling, the Post Office Secretary. 

²  www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator 

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