For the purposes of directing mail, the United Kingdom is divided by Royal Mail into postcode areas. The postcode area is the largest geographical unit used and forms the initial characters of the alphanumeric UK postcode. There are currently 121 postal areas in use in the UK and a further 3 often combined with these covering the Crown Dependencies of Guernsey, Jersey and Isle of Man.

Each postcode area is further divided into post towns and postcode districts. There are on average 20 postcode districts to a postcode area. The London post town is instead divided into several postcode areas.

The single or pair of letters chosen for postcode areas are generally intended as a mnemonic for the places served. Postcode areas, post towns and postcode districts do not follow political boundaries and usually serve much larger areas than the placenames with which they are associated. For example, within the PA postcode area the PA1 and PA78 postcode districts are 140 miles apart; and the eight postcode areas of the London post town cover only 40% of Greater London. The remainder of its area is covered by sections of twelve adjoining postcode areas: EN, IG, RM, DA, BR, TN, CR, SM, KT, TW, HA and UB.