Regulator Ofcom has fined Royal Mail £10.5m for missing its post-delivery targets in the 2023-2024 financial year.

The fine is the second in two years after the watchdog handed Royal Mail a £5.6m penalty in November 2023.

Royal Mail said less than three quarters of first-class post was delivered on time during the period, short of its 93pc target. And 92.7pc of second-class post was delivered on time, below its 98.5pc target, it said.

Ian Strawhorne, Ofcom director of enforcement, said: "With millions of letters arriving late, far too many people aren't getting what they pay for when they buy a stamp.

"Royal Mail's poor service is now eroding public trust in one of the UK's oldest institutions.

"This is the second time we've fined the company since the pandemic.

"Royal Mail has provided an improvement plan - and we're seeing some signs of progress - but it must go further and faster to deliver the service that people expect."

It comes as Daniel Kretinsky, the Czech billionaire, closes in on a £3.6bn takeover of Royal Mail.

The tycoon has vowed to boost the company's performance by spending £800m on rolling out parcel lockers and undercutting rivals.

He is aiming to roll out 20,000 lockers across the country, eclipsing the 5,000 currently operated by Amazon's own proprietary delivery network.

This forms part of Royal Mail's increased focus on parcels amid a continued decline in letter sending. Over the past two decades, annual letter volumes have declined from 20bn to 7bn and are expected to fall to 4bn in five years' time.

Mr Kretinsky has made a number of legally binding undertakings in a bid to ease concerns about Royal Mail passing into foreign ownership for the first time in its 500-year history.

Ministers are expected to give the green light to the deal in the coming weeks.