Your monthly bills are about to skyrocket. The Office of National Statistics (ONS) has published the latest inflation figures for the UK, which are used by some of the biggest mobile networks and broadband and television companies to calculate their annual price rises for existing customers. Spiralling inflation could force some customers to pay almost 10 percent extra each month – making it more important than ever before to take advantage of deals and discounts when they’re available. According to research from Ofcom, around 40 percent of all broadband customers are out of contract, if you’re one of them, you should check out our rundown of the best broadband deals to secure better monthly price (or faster speeds for the same price). The record-breaking price rises from BT, Vodafone, Plusnet, EE, TalkTalk and others follow confirmation from Virgin Media that the average customer on its fibre broadband plans will see bills rise by £4.70 a month. That’s around £56.40 extra to be paid each year.
The Consumer Price Index (CPI) has reached 5.4%, while the Retail Price Index (RPI) hit 7.5% this month, according to the latest inflation figures published by the ONS. To calculate their annual price rises, BT, EE, Plusnet, and Vodafone use the Consumer Price Index (CPI) + 3.9%. These companies typically rely on the figures published in January to calculate the price rise for the upcoming year. Based on the figures published this week, BT, EE, Plusnet, and Vodafone customers will see bills rise by 9.3%. For those on the most affordable broadband package from BT, the Full Fibre Essentials plan with average download speeds of 36Mbps (half the average home broadband speed in the UK), can expect to see an increase of £2.60 on their current £27.99 a month deal. That’s an additional £32.20 a year.
However, for those who bundle together faster full-fibre speeds with television, the 9.3% is likely to inflict much more pain on your current account. For example, BT’s VIP + Fibre 2 bundle, which includes average download speeds of 73Mbps, Sky Cinema, BT Sport, access to exclusive channels like Sky Atlantic, Sky Comedy and Sky Max via NOW, Sky Sports, Freeview channels via BT TV, and a Netflix subscription, usually costs £105.99 a month. Those who subscribe to this bundle can expect to see bills rise by roughly £9.80. That’s £117.60 extra each year.
For comparison, last year, with CPI measured at 0.6%, most broadband and mobile phone operators charged customers a total annual price hike of around 4.5% within the first few months of the year.
TalkTalk uses the CPI + 3.7% to calculate its price rises, so customers can expect to see slightly lower increases than those signed-up with the companies listed above. Shell Energy uses “up to 3%” + CPI to work out its annual rises. At the moment, Shell Energy charges £21.99 for its Superfast Fibre Plus bundle, which boasts download speeds of 67Mbps, so – if the company takes the higher end of its own range – users can expect to see prices increase by roughly £1.80 a month, or £21.60 over the next year.
O2 uses the figures published by the Office of National Statistics next month, instead of January like its competitors. However, it’s worth noting that O2 also relies on the Retail Price Index rather than the CPI, which is tracking much steeper.
Meanwhile, Sky Broadband, Sky Mobile, Virgin Media and Three Mobile charge a set amount each year, with no variation based on other factors, such as inflation. For example, Three Mobile has already confirmed to its customers that prices will only rise by 4.5% next year. That’s about half of what is currently projected for ISPs that rely on CPI or RPI. However, all of this could be subject to change as the rates that will be used by ISPs to calculate the annual hike haven’t been published yet.
There are a number of broadband companies that pledge to never increase prices throughout your contract. For example, Zen Broadband reassures all customers that they’ll keep the price at the start of their contract for the duration – regardless of whether they’re with the company for the next 12, 18 or 24 months. However, the company typically charges a little more than the competition from BT, Vodafone or Plusnet.
Of course, all of the figures listed above are estimates. Companies sometimes adjust the prices differently based on each individual bundle and package, so the percentages listed above should be seen as an average rather than a definitive calculation for your next broadband or television bill. BT, Vodafone, Plusnet, EE, TalkTalk, O2, Shell Energy and others will begin notifying customers in the coming weeks about their annual price rises, so keep your eyes peeled for an email or letter with the definitive calculation for your situation.
It’s also worth pointing out that annual price increases are not simply a ruse for Internet Service Providers (ISPs) to squeeze a little more cash from your current account every month, companies face rising costs from suppliers, not to mention that developing new systems and investing in infrastructure – like the ongoing plan from BT-owned Openreach to upgrade 25 million homes across the UK to full-fibre broadband by December 2026 – costs extra too. To try to compensate for these costs, the broadband providers listed above have linked annual price increases with the rate of inflation.
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Speaking to Express.co.uk, a spokesperson for BT and EE said: “As usage across our networks continues to increase and with our customers relying on us for connectivity more than ever before, it’s crucial we continue to invest in our networks, services and the latest technology. As such, and in line with our terms, our prices for existing customers will be increasing from 31st March, with a similar rise also being introduced for new customers. We remain committed to supporting customers on low incomes or facing financial hardship, and will therefore be freezing prices for our financially vulnerable customers.”
Lyndsey Burton, Managing Director at broadband comparison engine Choose, told Express.co.uk, “It is time for Ofcom to act again on mid-contract price increases. They have previously brought in regulations specifically to prevent financial hardship, yet their safeguards are failing to protect customers from exactly that. The pandemic has demonstrated how reliant we are on broadband and mobile services to keep us connected to each other. Ofcom concede these are ‘essential’ services and yet they are failing in their duty to support customers’ ability to budget for them. As the current economic climate shows, CPI and RPI linked prices are difficult to plan for and customers will only get a few months’ notice before inflation-beating price rises are implemented.
“Broadband contracts are usually between 12 and 24 months in length, with many customers signing up to 18-month deals. Surely it is fair and reasonable to expect providers to fix their prices completely during the contract period to ensure customers know where they stand financially until the contract runs out. Ofcom either needs to ban mid-contract price hikes completely or, at the very least, they must set a cap that more fairly distributes inflationary costs.”
The only thing that could seriously slash your bills is switching to a new contract with the same provider or a rival broadband firm. If you’re currently in-contract, this won’t be possible – although, it might be worth talking to a customer service representative as they might be able to switch you to a new deal if you’re willing to sign up to a further 24-months, for example. If you’re out-of-contract, there are some brilliant deals only available to new customers right now. While you’ll still be faced with an annual price rise with the majority of broadband suppliers in the UK, if you’re starting from a lower monthly cost – or getting faster speeds, television channels, or more mobile data – for the same cost, that should make this bitter pill a little easier to swallow.
Express.co.uk has rounded up some of the best broadband deals available in the UK right now. Find them below…
Published at Sat, 22 Jan 2022 10:20:00 +0000