Millions will see telecoms bills jump as the cost of living crunch continues

Telecoms bills are set to be hiked by as much as 9.3 per cent this spring as the cost of living continues to send household costs soaring.

Every year BT, EE, Plusnet, Vodafone, O2, TalkTalk, Shell Energy and others raise their ‘in contract’ prices, in line with the Consumer Price Index (CPI) rate of inflation, which recently hit 5.4 per cent.

The providers then add up to 3.9 per cent, meaning bills could increase by nearly 10 per cent soon.

Over 15million consumers are set to be impacted by these price rises, which come into effect from as early as 31 March 2022.

This is Money contacted the telecom firms to see how much they were putting their prices up by.

BT said bills for its customers, as well as EE and Plusnet consumers, would increase by 9.3 per cent, or an average of £3.50, which is based on the average a BT or EE customer would pay – equivalent to £42 per year.  

On average, Plusnet customers will see a monthly increase of £2.40 or £28.80 per year. 

A BT spokesperson 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 31 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.’ 

BT said the increases were happening as it has been impacted by higher rates of inflation as well as increased costs from suppliers that it needs to factor into its prices.

It added data usage has increased by almost 50 per cent annually whilst prices change by relatively modest amount.

Customers will be contacted well ahead of their prices changes and those on BT Home Essentials, BT Basic and Home Phone Saver will not see an increase to their prices in 2022.

There are a number of price increases to telecom bills expected by the beginning of April 

Vodafone confirmed it will increase bills by 9.3 per cent whilst TalkTalk will increase bills by 9.1 per cent.

Previously, Virgin Media announced it would be increasing its broadband prices, reportedly by an average of £4.70 a month equating to an annual increase of £56.40.

Virgin added, unlike other firms, that all customers affected by the price increase can leave their contract without paying any early termination charge.

To do this, customers will need to contact Virgin Media within 30 days of receiving notification of the price increase.  

Shell Energy said no decision has been made on when or by how much prices may change this year. 

It added customers would be notified 30 days before any change takes effect.

Sky has yet to confirm whether it will be raising its in-contract prices, but its website states ‘prices may change during your contract.’

In 2021, its customers were impacted by price rises of up to £72 per year.

Compare: Consumers are encouraged to shop around for the best deals on their telecoms bills

With prices increasing, consumers must be allowed to walk away penalty-free from broadband and mobile contracts hit by unprecedented mid-contract rises of up to 11 per cent, say Uswitch. 

While providers must permit customers to leave penalty-free in light of unexpected mid-contract price rises, the majority of increases this spring will not be covered, as most contracts contain a rule allowing inflation-based price changes.

In light of these unprecedented mid-contract price rises, Uswitch is calling for telecoms providers to let customers walk away penalty-free if they find the increases unaffordable and for industry regulator Ofcom to put an end to inflation-linked price increases.

Ernest Doku, telecoms expert at Uswitch, said: ‘With inflation at its highest level in 20 years, many mobile and broadband consumers will have never experienced price rises like these before.

‘Worryingly, more than half of people do not know these mid-contract rises are on their way and many more are unaware of how they are calculated.

‘With most of the main providers planning increases there is nowhere to hide, and consumers are currently unable to escape mid-contract rises that are written into their contracts without paying a penalty charge.

‘Ofcom should be tightening its rules regarding mid-contract increases being linked to the now rising inflation, so that all subscription pricing is spelt out in pounds and pence. 

‘Broadband and mobile users cannot be expected to forecast future inflation rates when they take out their contracts.

‘In the meantime, at a time where the cost of living is under real pressure for households, providers should let consumers walk away penalty-free from these excessive, unexpected hikes.’ 

How to save on your bills 

Despite rising costs, customers can save on their telecoms bills.  

Customers that are not within a fixed contract are encouraged to use price comparison sites to see if they could save on their bills. 

If they are out of their allotted fixed term, they can leave and switch penalty free.  

It is also worth contacting your provider directly to see if you can negotiate a better deal. 

Research the best deals and ask them to either match or better the offer.  

However, if you’re in contract it will be unlikely you can leave it penalty free. 

Make a note of when it is due to end and ensure you compare deals then. 

Consumers should also review their bills regularly. If you are subscribing to multiple services, decide if you use them enough to warrant the cost. If not, cancel the subscriptions and save.