This fine is the third-largest ever imposed by the communications watchdog.
Royal Mail delivered 77% of first class mail and 92.5% of second class mail on time during the 2024-25 financial year, Ofcom found.
This was short of the delivery giant’s respective 93% and 98.5% targets.
Royal Mail fined £21 million for missing delivery targets
Ian Strawhorne, director of enforcement at Ofcom, said the failures are “persistent” and “unacceptable”, adding that customers “deserve better”.
He added: “Millions of important letters are arriving late, and people aren’t getting what they pay for when they buy a stamp.
“These persistent failures are unacceptable, and customers expect and deserve better.
“Royal Mail must rebuild consumers’ confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises.”
A spokesperson for Royal Mail said: “We acknowledge the decision made by Ofcom today and we will continue to work hard to deliver further sustained improvements to our quality of service.
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“A key area of focus and investment has been the detailed work ahead of full implementation of our new delivery model, enabled by Ofcom’s changes to the universal service.
“This is critical to enable us to drive a step change in quality of service.
“We have also implemented important changes across our network including recruiting, retaining and training our people, and providing additional support to delivery offices.”
The company added that trials of the universal service changes were “working, with improvements in deliveries” in parts of the UK.
Ofcom gave the green light to Royal Mail to scrap second class letter deliveries on Saturdays and change the service to every other weekday, with the changes being rolled out in the coming months.
But under its universal service obligation, Royal Mail must keep Monday to Saturday deliveries for first-class post and maintain the target for second-class letters to arrive within three working days.
Royal Mail ‘pulling out all the stops’ for busy Christmas period
The news comes after the delivery giant said it would be “pulling out all the stops” ahead of Christmas to make sure demand is met.
To do this, it will employ 20,000 temporary workers.
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The seasonal roles will run from late October through to early January 2026, to help deal with the likes of Black Friday, Cyber Monday and Christmas.
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These new jobs will be split across two parcel hubs, four seasonal parcel sorting centres and 37 mail centres across the UK.
England will have 12,000 mail centre sorting roles available, and Scotland will have 2,000 up for grabs.
Alongside that, Wales will have 600 and Northern Ireland will have 400.
In this busy period, there is expected to be an increase of online orders and extra seasonal sorting offices will be introduced to help meet demand.
