How to avoid rising broadband bills ahead of price hike for customers

Firms are due to introduce price hikes in April. Credit: PA

By James Gray, ITV News Multimedia Producer

Millions of broadband and mobile phone customers can expect to face monthly bill increases from April, as providers prepare to introduce their annual price hikes.

The increases could see consumers made to pay hundreds of pounds more across the year, while the cost-of-living crisis continues to challenge household incomes.

In spite of this, some customers could be in a position to switch providers and avoid growing bills.

So, what are your options when it comes to changing deals? ITV News explains.

How much are bills increasing?

Customers can, depending on their provider, expect broadband rates to rise by at least 14% next month.

Firms increase rates for customers every April, often in line with January's consumer price index (CPI) or the retail price index (RPI), which were 10.5% and 13.4% respectively, plus an additional 3-3.9%.

BT, EE, Plusnet and Vodafone broadband contracts allow prices to go up by CPI plus 3.9%, while TalkTalk and Shell Energy work on an increase of CPI plus 3.7% and 3% respectively.

Sky and Virgin Media contracts allow mid-contract price increases, but they do not stipulate a pricing formula in the same way as rivals.

And BT has confirmed an increase this year of 14.4% - CPI of 10.5% plus 3.9%.

Millions of mobile phone customers will be affected by the bill increases. Credit: PA

What options do customers have?

Most people will see new broadband rates applied mid-contract which means they are left with two choices: accept the new prices or pay an exit fee to end their contract.

Which? calculated that low-income BT, Plusnet, TalkTalk, EE or Vodafone customers - earning £21,000 or less a year - could face the highest exit fees if they wanted to leave a year early.

The consumer champion's research found that BT would charge £194.34, closely followed by Plusnet, TalkTalk and EE customers who could face exit fees of £133.12, £122.40 and £116.63 respectively.

Can customers switch without paying an exit fee?

Customers who are coming to the end of their existing contract do have the option to switch provider before the rise takes place, making themselves exempt.

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Broadband expert Ernest Doku, from Uswitch, said: "If you are out of contract on your deal, now is the perfect time to refresh your deal or move to a new provider altogether.

"If you have less than six months left on your contract, you may find it pays to make an early switch. While many providers will charge you an exit fee for leaving a deal early, the cost of your remaining term could be less than you would save by taking out a cheaper offer.

"According to Uswitch data, broadband customers on average can save £162 a year by switching their provider, while customers on pay-monthly mobile deals can save an average of £321 annually by moving their handset over to a SIM Only contract."

Uswitch recommends that those who are mid-contract and looking to switch providers should check the terms and conditions of their existing deal to find out what options are available to them.

Alternatively, providers offer social tariffs with fixed prices that are exempt from annual rises.

Which? said the average low-income customer affected by the price rise could save as much as £220.32 - or £18.36 per month - by switching to a social tariff.

A recent broadband survey by the consumer group found three quarters of low-income consumers are unaware of social tariffs, leading to calls for firms to do more to raise public awareness.

Could providers be asked to cancel mid-contract price hikes?

Which? is calling on telecoms firms to "urgently" cancel the hikes for their most financially vulnerable customers and allow all customers to leave without penalty if they face mid-contract price rises.

The watchdog said it was "completely unacceptable that during an unprecedented cost-of-living crisis, telecoms firms are profiting from those who can least afford it".

Vodafone has confirmed it is automatically exempting customers that it has identified as financially vulnerable from this year’s price rises.

Meanwhile, TalkTalk has said it will automatically exempt its most financially vulnerable customers, but has not specified its criteria for this.

An Ofcom spokesman said: "Providers - like all businesses - face a range of cost rises. Wholesale costs are just one of these. Ofcom limits some of Openreach's wholesale price rises to inflation. It's entirely up to providers whether they choose to increase their prices, and not all of them do.

"While Ofcom doesn’t set retail prices, inflation-linked price rises can be unclear and unpredictable, and we're concerned that providers are making it difficult for customers to know what to expect. So we're taking a thorough look at these types of contract terms to see whether tougher protections are needed."

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