Broadband providers urged to cancel price hikes for vulnerable customers
The new tax year will see a host of broadband providers introduce price hikes, which track the rate of inflation plus around 4%. Depending on the provider, this can work out at an increase of above 14%.
These price hikes are permitted under the terms of the contracts households sign with providers, meaning their only option is either to pay the higher bills or face an exit fee in order to leave their deal and move to a new provider.
Which? pointed to the example of Vodafone, which has already confirmed it will be automatically exempting customers who have been identified as being financially vulnerable from the price hikes. TalkTalk has said that it will also automatically exempt financially vulnerable customers though it hasn’t pointed out how this will be assessed or publicised.
The organisation said that other providers should make the same commitment in order to protect the worst-off from hikes which they are least able to deal with.
The highest and lowest prices
Analysis by Which? found that a low income customer ‒ defined as earning £21,000 or less a year ‒ with BT, EE, Plusnet, TalkTalk or Vodafone will see an average price hike of £52 a year, and end up paying £431 a year for their broadband.
The biggest rise will be seen by BT customers at £58.20 as a result of the increases of more than 14 per cent. This is ahead of the £51.84 extra paid by EE and £49.44 paid by TalkTalk customers. Meanwhile, Plusnet customers will face paying an extra £48.43 and Vodafone customers will pay an additional £44.93.
If those households want to leave their deal, they will face paying over £100 in exit fees.
The exit fee is highest for low-income BT customers, at £194.34 if leaving a year early. Plusnet has the second highest exit fee at £133.12, followed by TalkTalk at £122.40 and EE at £116.63. The lowest exit fees will be paid by Vodafone customers at £101.31.
‘Cancel the 2023 price hikes’
Rocio Concha, director of policy and advocacy at Which?, said that with only a couple of weeks to go before the price rises come into effect it was “hugely concerning” that providers are not protecting their most at-risk customers.
She added: “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.”
Can social tariffs help?
One possible option for those on low incomes are social tariffs. These tariffs are cheaper deals aimed at households on Universal Credit or other benefits, but there have been concerns over the level of take-up of social tariffs.
Analysis by Which? found that typical low-income households impacted by the price rises could save as much as £220 a year by moving to a social tariff.