Under current rules, broadband and mobile companies are allowed to increase prices mid-contract in line with inflation, plus up to 3.9% extra on top of this – and over the last two years some Brits have seen increases of over 25%
Brits are paying £15.20 more a month for broadband after the latest round of hikes in April – and the most loyal customers are the ones who are hit the worst.
According to data from Uswitch, mobile phone customers have seen their bills increase by £7.90 a month and on average, customers are paying £182.40 more a year for their broadband, and £94.80 for mobile after April’s hikes this year. This adds up to £277.20 a year combined.
Under current rules, broadband and mobile companies are allowed to increase prices mid-contract in line with inflation, plus up to 3.9% extra on top of this. Most use Consumer Prices Index (CPI) inflation data for December, or Retail Prices Index (RPI) for January to decide their increases – this year’s hikes sat between 7.9% and 8.8%.
Due to high inflation over the last two years, customers have faced major increases in their bills compared to other years with customers seeing hikes of up to 17.3% last year.
Uswitch says the worst affected by the price hikes over the years has been loyal customers. According to the price comparison site, mobile customers across both pay-monthly and SIM-only contracts who have stayed with their provider for eight to nine years paid an extra £13.20 on their mobile bill last month – a huge rise in comparison with the national average price increase of £7.90. Those who switched their provider less than one year ago were the best off, with their increases averaging out at £6.70.
Broadband customers who stayed with their provider for seven to eight years paid an extra £22.10 this month – significantly more than the national average price rise of £15.20. Those who switched less than one year ago paid 23% lower than the national average.
Despite the impact on the nation’s outgoings, well over half of Brits (57%) say they weren’t expecting the mid-contract price increase this year. This is despite regulations from the ASA, which came into effect in December 2023, requiring providers to ensure information on price rises is “up front and prominent” for consumers, rather than detailed in small print.
Ofcom has announced a consultation that outlines plans to prohibit inflation-linked price rises linked to uncertain future figures, with findings due to be published in spring 2024. Uswitch says while this could offer customers protection from uncertain price increases during their contract, this will only apply to customers taking new contracts once in effect – so customers still within their previous contract will not benefit from these protections.
Sabrina Hoque, telecoms expert at Uswitch.com, said: “An expected Ofcom ban on inflation-linked price increases will be welcome news to consumers, giving them increased clarity on what they’ll pay for their contract upfront. But this still doesn’t undo the impact of year-on-year rises for millions of Brits.”
“There are a few different factors in play that contribute to these big variations, especially for those who have been with their provider a long time. A key factor is the compounding effect of annual year-on-year mid-contract price rises, as each year’s percentage increase will be based on a bigger and bigger total. After multiple years, this will really make a difference.
“Customers seeing these price rises can still take action. Most broadband and mobile contracts range from around 18 to 24 months. Your provider will let you know when your contract is about to end, so don’t be tempted to ignore these emails when they come through – it really only takes a few minutes to run a comparison and see what else is out there.
“And you don’t even have to leave your provider – your current provider could have some brilliant new offers available. Don’t fall in the trap of being out of contract, call them up and negotiate a better deal.”
