diff --git a/app/celery/tasks.py b/app/celery/tasks.py
index 616d9ee77..0d3a6bb4f 100644
--- a/app/celery/tasks.py
+++ b/app/celery/tasks.py
@@ -4,6 +4,7 @@ from collections import namedtuple, defaultdict
 
 from flask import current_app
 from notifications_utils.recipients import (
+    format_postcode_for_printing,
     RecipientCSV
 )
 from notifications_utils.statsd_decorators import statsd
@@ -305,6 +306,10 @@ def save_letter(
     # we store the recipient as just the first item of the person's address
     recipient = notification['personalisation']['addressline1']
 
+    notification['personalisation']['postcode'] = format_postcode_for_printing(
+        notification['personalisation']['postcode']
+    )
+
     service = dao_fetch_service_by_id(service_id)
     template = dao_get_template_by_id(notification['template'], version=notification['template_version'])
 
diff --git a/requirements-app.txt b/requirements-app.txt
index f719bba6b..07d295255 100644
--- a/requirements-app.txt
+++ b/requirements-app.txt
@@ -27,4 +27,4 @@ notifications-python-client==5.5.1
 awscli-cwlogs>=1.4,<1.5
 
 
-git+https://github.com/alphagov/notifications-utils.git@36.6.2#egg=notifications-utils==36.6.2
+git+https://github.com/alphagov/notifications-utils.git@36.8.0#egg=notifications-utils==36.8.0
diff --git a/tests/app/celery/test_tasks.py b/tests/app/celery/test_tasks.py
index 698e61e74..05f3d3514 100644
--- a/tests/app/celery/test_tasks.py
+++ b/tests/app/celery/test_tasks.py
@@ -961,7 +961,7 @@ def test_save_letter_saves_letter_to_database(mocker, notify_db_session):
         'addressline4': 'Wibble',
         'addressline5': 'Wobble',
         'addressline6': 'Wubble',
-        'postcode': 'Flob',
+        'postcode': 'SE1 2SA',
     }
     notification_json = _notification_json(
         template=job.template,
@@ -1021,6 +1021,31 @@ def test_save_letter_saves_letter_to_database_with_correct_postage(mocker, notif
     assert notification_db.postage == postage
 
 
+def test_save_letter_saves_letter_to_database_with_formatted_postcode(mocker, notify_db_session):
+    service = create_service(service_permissions=[LETTER_TYPE])
+    template = create_template(service=service, template_type=LETTER_TYPE)
+    letter_job = create_job(template=template)
+
+    mocker.patch('app.celery.tasks.letters_pdf_tasks.create_letters_pdf.apply_async')
+    notification_json = _notification_json(
+        template=letter_job.template,
+        to='Foo',
+        personalisation={'addressline1': 'Foo', 'addressline2': 'Bar', 'postcode': 'se1 64sa'},
+        job_id=letter_job.id,
+        row_number=1
+    )
+    notification_id = uuid.uuid4()
+    save_letter(
+        letter_job.service_id,
+        notification_id,
+        encryption.encrypt(notification_json),
+    )
+
+    notification_db = Notification.query.one()
+    assert notification_db.id == notification_id
+    assert notification_db.personalisation["postcode"] == "SE16 4SA"
+
+
 def test_save_letter_saves_letter_to_database_right_reply_to(mocker, notify_db_session):
     service = create_service()
     create_letter_contact(service=service, contact_block="Address contact", is_default=True)
@@ -1037,7 +1062,7 @@ def test_save_letter_saves_letter_to_database_right_reply_to(mocker, notify_db_s
         'addressline4': 'Wibble',
         'addressline5': 'Wobble',
         'addressline6': 'Wubble',
-        'postcode': 'Flob',
+        'postcode': 'SE1 3WS',
     }
     notification_json = _notification_json(
         template=job.template,