The price of first and second class stamps is to increase by 1p each to 63p and 54p from March 30, Royal Mail has announced.

Sending a large letter will increase by 2p to 95p for first class and by 1p to 74p for second class.

The postal group said it had thought "carefully" about the impact on its customers before deciding to raise letter prices, adding that it recognised how the recent tough economic conditions had made it difficult for consumers and businesses.

Royal Mail also announced that it is simplifying and cutting the price of sending a second-class medium parcel, and will maintain prices for second-class small parcels which was introduced as a Christmas promotion.

From March 30, second-class medium parcels weighing up to 2kg will be priced at £4.89, which Royal Mail said represents a saving of up to £3.11.

The company said stamp prices in the UK were among the best value in Europe.

Citizens Advice chief executive Gillian Guy said: "Royal Mail needs to focus on making efficiency savings rather than relying upon raising prices.

"We are concerned that stamp prices have risen above inflation and households and businesses using Royal Mail's Redirection service will also face much larger costs.

"When changing address, the Redirection service is highly useful and helps to prevent identity theft and fraud. With Royal Mail the only firm that offers this service, people have no choice but to pay the increased prices.

"It's good to see Royal Mail being more competitive in the UK parcel market by cutting some second-class prices and maintaining the Christmas promotion. But consumers will want to see a fair balance between Royal Mail raising prices and saving money by being a more efficient organisation."