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Millions of low earners miss out on special broadband discounts

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15/02/2022
More than four million households in receipt of Universal Credit are missing out on special broadband discounts which could save them £144 a year.

An estimated 4.2 million households in receipt of Universal Credit are eligible for discounted broadband packages, sometimes known as ‘social tariffs’.

But just 55,000 homes have signed up – a dismal 1.2% – meaning millions are missing out on average yearly savings of £144 on their internet, according to the communication regulator, Ofcom.

As an example, an unemployed Universal Credit recipient spends an average of £27 per month on a standard broadband package, roughly 8.3% of their monthly disposable income. A £15 social tariff would almost halve their broadband cost and use up 4.6% of disposable income, Ofcom said.

These discounted social tariffs cost between £10 and £20 a month for broadband speeds ranging from 10Mbit/s to 67Mbit/s.

Currently, just six broadband providers offer a discount deal for low-income families:

  • BT
  • Community Fibre
  • Network
  • Hyperoptic
  • KCOM
  • Virgin Media 02.

But Ofcom is now urging other broadband firms, including EE, Plusnet, Shell, Sky, TalkTalk and Vodafone to introduce their own social tariffs to “support struggling households”. It also wants to see these deals promoted more widely, and wants to ensure they’re quick and easy to sign up to.

As such, where a provider sends communication about price rises, Ofcom said they should also include details of social tariffs.

Details about the discounted packages should appear prominently on websites and information about who is eligible should also be clearly given.

Lastly, the regulator said customers should not be put off from applying by making it hard to prove they’re eligible.

‘Companies to step-up their support’

It comes as Ofcom research revealed 84% of people on eligible benefits are unaware of social tariffs.

“We have seen limited evidence of providers actively promoting their social tariffs to eligible customers. These deals don’t generally feature in broadband advertising or price comparison website searches,” it stated.

Ofcom’s affordability report also revealed 1.1 million households (5%) are struggling to afford their broadband package, rising to 10% among the lowest earners.

And given the rise in food and fuel prices for the year ahead, household finances will be squeezed further.

Lindsey Fussell, networks and communications group director at Ofcom, said: “People rely on their broadband for staying in touch, working and learning from home. But for those who are really struggling with rising bills, every penny counts.

“Special discounts can make all the difference, and too many broadband firms are failing either to promote their social tariff or to offer one at all. We expect companies to step up support for those on low incomes, and we’ll be watching their response.”

‘Shameful take-up says it all’

Matthew Upton, director of policy at Citizens Advice, said: “We know that 1 in 10 people aren’t confident they’ll be able to pay their broadband bill in the next three months. This comes as the majority of us face huge increases on our broadband bill, piling on yet more pressure in the middle of a cost-of-living crisis.

“It’s been more than six months since Ofcom and the government started pushing social tariffs as an answer, but the shameful 1% take-up says it all. It’s people on the lowest incomes who are missing out.

“If firms aren’t able to show serious increases in the number of people they’re helping move to these tariffs in the next six months, the government and Ofcom must take action.”

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