Millions of mobile phone and internet users are facing a price increase of 17.3% on their bills in just a week’s time.
Every April, many broadband and mobile firms raise their prices in line with the Consumer Price Index (CPI) plus an additional 3-3.9%.
As these price rises are often applied mid-contract, people either have to accept these new prices or pay costly exit fees to leave their contract early.
But with some 11 million people out of contract, if they switch before the rise next week they would be exempt from the increase.
It comes as industry regulator Ofcom launched a review to determine if consumers have enough clarity on mid-contract cost increases.
Uswitch has also been campaigning to allow all consumers to leave contracts penalty-free in the face of price rises as most providers don’t allow this. The price comparison site believes providers who impose inflationary increases should allow customers to leave their contract early without penalty, or offer contracts where the price remains fixed for the duration.
Ernest Doku, telecoms expert at Uswitch, said: “There is still time to avoid the impact of April’s price rises. Broadband and mobile customers should check now to see if they can switch to avoid paying more than they need to.
“Millions of consumers are currently out of contract, and therefore can still shield themselves from the brunt of these inflation-busting increases.
“Not only could you switch to a faster and more reliable product, but also pay less per month – although future price rises may still apply from 2024 in many cases.”
Who has the highest early exit fee?
Some internet companies have confirmed they will be doing more to help vulnerable and low-income households. For example, Vodaphone is automatically exempting customers that it has identified as financially vulnerable from this year’s price rises.
TalkTalk has said it will automatically exempt its most financially vulnerable customers – but did not explain its criteria for assessing this or how it would be publicised.
Providers know that for financially vulnerable customers, mid-contract price rises are potentially devastating – which is why their social tariffs offer fixed prices that are exempt from annual rises.
Based on the average amounts paid by low-income customers in Which?’s latest broadband survey, the consumer champion calculated how much a low-income BT, EE, Plusnet, TalkTalk or Vodafone customer (those earning £21,000 or less a year) could see their payments increase.
It found this group could see payments go up £77 per year. On average, they face a rise of £52 annually and look set to pay £431 a year for their broadband – at least 2% of their annual income.
BT customers had the highest monthly prices of any of the companies Which? looked at and could see an annual increase of almost £60 from next week. Low-income BT customers could also face the highest exit fees, costing £194.34 if they want to leave a year early.
Switching to a social tariff
Which? research shows that the average low-income customer affected by the price rise could save as much as £220.32 – £18.36 per month – by switching to a social tariff.
These are cheaper broadband and phone packages for people claiming Universal Credit, Pension Credit, and some other benefits.
They are delivered in the same way, just at a lower price. Some providers may call them “essential” or “basic” broadband.
BT customers would make the biggest annual saving of £260.16 (£21.68 a month) by switching to a social tariff. Vodafone customers would make the lowest savings of £168 a year (£14 a month).
Rocio Concha, Which? Director of Policy and Advocacy, said: “Telecoms providers must urgently cancel the 2023 price hikes for financially vulnerable customers. They should work to proactively identify these customers and ensure they’re not financially penalised, even if they don’t take up a social tariff.”