The cost of postage is set to increase as New Zealand Post continues to struggle with a significant loss of income from fewer letters being sent.

The state-owned postal operator announced on Wednesday a price hike for all postage from July 1, which will see the cost of sending a standard letter within the country increase from $1 to $1.20.

Chief marketing officer Bryan Dobson says that to maintain the postal network of 880 outlets and 1.98 million delivery places NZ Post has to increase prices.

"Careful consideration has been taken in making these pricing decisions, however, given the letter decline challenges NZ Post faces they are necessary."

Other charges are also going up. The cost of sending a letter overseas will increase 20 cents while sending a parcel within New Zealand will cost an extra 50 cents.

A full list of prices is available on the NZ Post website.