AUSTRALIA will follow in the footsteps of the UK and privatise the mail service within five years, policy experts believe.

The move would deliver a likely windfall of more than $2 billion to government coffers and a privatised Australia Post would provide better customer service, industry watchers say.

The UK Government confirmed today it would sell a majority stake in its postal service, Royal Mail, floating it on the London Stock Exchange by April.

Under the plan, 10 per cent of the shares would be given to Royal Mail workers.

While the move has sparked fears in Britain of rising stamp prices and cuts to services, experts say it is a matter of time before Australia follows suit.

"Postal services are businesses that are facing a complex set of pressures and it's certain Australia Post is going to be a very different enterprise in five years' time," University of Melbourne public policy fellow Nicholas Reece said. "It will probably be privately owned and this is a good thing."

Mr Reece said governments in economies similar to Australia, such as Germany and Austria, had benefited from selling their postal services.

Julie Novak, research fellow at right-wing think tank the Institute of Public Affairs, said there would be two key benefits to privatising Australia Post, which has assets of more than $4.17 billion.

"There would be the immediate fiscal benefit to the government itself," Ms Novac said. "And we would expect a more effective service, having seen seen how the deeper parcel market has benefited consumers with more timely delivery."

Australia Post declined to comment. But managing director Ahmed Fahour reportedly said in June that he was not concerned by the prospect of privatisation.

He said it was a matter for the Federal Government, which he viewed as the only shareholder in the company.