Broadband bills could rise by more than £100 next year
Some broadband bills may rise by up to £113 next year, according to data from consumer group Which?.
Those affected could see their broadband bills rise by 14%, a hike from the 10% average price increase seen this year.
The price hikes would be on top of soaring costs for other household bills including energy, food, and fuel.
BT customers would see the largest hikes of an extra £113.07 to bills when compared to the amount they paid at the start of 2022, according to the research from consumer group Which?.
It calculated the figures based on a 10% inflation level in January, the month which some providers use to calculate their mid-contract price rises.
EE could add an extra £105.46 to bills next year on average, while Vodafone and TalkTalk could add an extra £92.35 and £90.15 respectively to bills. The smallest hike would be from Plusnet, but this would still add £87.15 to average bills.
In 2022 customers have already seen price hikes of between £33 and £43. The consumer group is calling for providers to allow people to leave a contract without paying a penalty, if prices rise above the level of inflation.
It also said they need to work harder to support people with the rising cost of living.
Annual mid-contract price hikes
Many broadband companies increase their bills every year in line with inflation.
They usually push prices up in April and the hike is based on the January level of inflation. Many add an additional amount on top, of up to 3.9%.
These mid-contract price hikes are allowed and are written into the terms and conditions of broadband contracts.
In August inflation was at 9.9% and while this was a small fall from July, it is expected to rise further and could be 10% or more by January.
But if these price hikes were cancelled, customers could save between £102 and £133 next year, Which? calculated.
If people decide to switch away from a provider while they are still in the minimum contract period, they will usually face a penalty. Sky and Virgin Media are the only major providers not to include automatic mid-contract price hikes in their T&Cs, but they often announce them on an ad-hoc basis.
However, if a price hike isn’t written into a contract, customers can usually switch away without paying a fee.
Which? also argued that as most broadband contracts last for 18 or 24 months, it’s difficult for people to predict how their price will change in this period.
It also said many people stick with the same provider, even after a fixed-term contract ends, and pay a higher price as a result.
Increase awareness of social and discounted tariffs
Telecoms providers need to do more to help people through the cost-of-living crisis, the group said.
It is calling on them to carefully consider if mid-contract price rises are justified in the current economic climate and to work harder to increase awareness of social and discounted tariffs.
The level of VAT paid on telecoms services is 20% yet Which? said this should be lower and more inline with the 5% paid by gas and electricity services. It is also calling for an end to VAT on social tariffs for low-income households.
Rocio Concha, Which? director of policy and advocacy, said: “It’s unacceptable that many broadband customers are facing price hikes of up to £113 to their bill during an unrelenting cost-of-living crisis.
“Customers should be allowed to leave their contract without penalty if prices are hiked mid-contract, regardless of whether or not these increases can be said to be ‘transparent’.
“It’s especially important that those who are eligible for social tariffs don’t incur any extra charges when moving to discounted tariffs, even if they’re currently mid-contract. Providers also shouldn’t charge any setup costs for social tariff customers.”
The Which? research comes as Ofcom publishes its quarterly complaints data on the telecoms providers.
It found that between April and June, Shell Energy had the highest number of broadband and landline complaints per 100,000 customers while Sky had the fewest.
For mobile operators, BT Mobile and Virgin Mobile were the most complained about while Tesco Mobile, EE, Sky Mobile and iD Mobile attracted the fewest complaints in this sector.
Virgin Media had the highest number of complaints about pay-TV services and Sky had the fewest.