Money Wellness
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calendar icon30 Nov 2023

8.4 million households facing broadband hikes in 2024

Around 8.4 million households are tied to broadband contracts that will increase in April because of inflation-linked mid-contract rises, according to research from Which?

The consumer champion estimates that the rises will see broadband customers pay around an extra £221 million to providers.

An additional 13.7 million UK adults are also tied to mobile phone contracts that are also subject to inflation-linked min-contract rises, which will generate an estimated £267 million.

Many broadband and mobile providers hike their prices each year to combat the inflation rate and rising business costs. They can even do this if you’ve agreed to a fixed monthly rate for your contract period.

The practice is perfectly legal.

Prices rose sharply in 2023 because inflation was so high with contracts increasing by 14.4% on top of other cost of living pressures.

If you’re mid contract with your broadband company, your bills are likely to go up again in April as most providers have annual price hikes linked to inflation set in their terms and conditions. Unfortunately, there’s no way of knowing what that increase will be until January as it’s linked to December’s inflation figures although it’ll definitely be lower than last year.

A small percentage of customers won’t be affected by the price rises because they’re with a provider that fixes their cost for the whole contract. However, these tend to be smaller providers who aren’t as widely used as the larger companies.

Often the only way to avoid these rises is by taking out a discount social tariff. These are only available for people on certain benefits such as universal credit or personal independence payment (PIP).

Which? is using its finding to call for Ofcom to ban inflation-based mid-contract price rises. You can sign the petition here if you’d like to support them.

 

What are mid-contract price rises?

Mid-contract price rises are when a provider increases the cost of your monthly broadband or mobile phone bill during your contract term.

They occur once a year in April and are tied to the Consumer Price Index (CPI) inflation figure that’s published every January.

Many providers add a further 3% to the inflation figures to help offset their own rising business costs.

Can I leave my contract to avoid mid-contract price rises?

Whether you can leave mid contract depends on the terms and conditions of your contract.

Usually a fixed contact for a service means that you’ve both agreed to pay a set amount each month on an agreed date.

However, broadband and mobile phone contracts are different – they tend to stipulate the price could increase mid-contract.

If price increases are included in your contract and you don’t agree to the terms, you won’t be able to sign up for the service. You’ll have to find a provider who doesn’t include yearly increases in their contracts but there are very few of these.

Essentially if you want to leave your contract because of these price rises and have agreed to the term and conditions, you will have to pay exit fees.

What are social broadband and mobile tariffs?

Social tariffs are cheaper broadband and phone packages for people claiming universal credit, pension credit and some other benefits. Some providers refer to them as ‘essential’ or ‘basic’ broadband.

They’re delivered in the dame way as normal packages, just at a lower price.

Here’s how they can help:

  • They’re cheaper than a regular package with current prices ranging from £10-£20.
  • Most tariffs offer superfast broadband at speeds over 30 Mbit/s – fast enough for you to keep in touch with friends and family, stream HD films or shop online.
  • They’ll cost you next-to-nothing to set up – if you do have to pay anything it’ll only be a small amount.
  • If you provider offers a social tariff it won’t cost you anything to switch.
  • The prices won’t increase mid-contract so what you agree is what you pay throughout.
  • And it costs you nothing to leave mid-contract.

If your current provider doesn’t have a social tariff, they may allow you to leave your current contract without paying a penalty.

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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