You are here: Home - Household Bills - News -

Record 8m households struggling to pay phone and broadband bills

0
Written by: Emma Lunn
29/09/2022
Telecoms firms have been urged to increase support for customers as record numbers report struggling to afford phone and broadband deals.

Figures from the regulator Ofcom show that the number of households having affordability problems has doubled since last year. It has told telecoms firms to reconsider whether price hikes can be justified during the cost of living crisis.

The regulator has also asked telecoms companies to offer more cheap ‘social tariffs’ to cash-strapped customers and to advertise these deals better.

Ofcom’s annual affordability study found that nearly a third (29%) of customers – about 8 million households – are having problems paying for their phone, broadband, pay-TV and streaming bills.

The number of struggling households has doubled over the past year (from 15% in April 2021) and now stands at its highest level since Ofcom records began.

Younger adults aged 18 to 24 (43%), households with children (40%), benefits recipients (39%) and people with a disability or limiting condition (39%) are most likely to be having difficulty affording their communications services.

One in seven (14%) respondents said they had cut back other spending, such as on food and clothing, to afford their communications services, while 9% had cancelled  a service.

Millions missing out on superfast ‘social tariffs’

Ofcom research shows that millions of low income households are still missing out on broadband ‘social tariffs’. These are special discounted broadband connections designed for people claiming certain benefits.

The regulator said providers are not doing enough to advertise this support, while some are not offering these packages at all.

Social tariffs on offer include BT Home Essentials which is £15 a month, and Essential Broadband from Virgin Media which is also £15 a month.

Ofcom said the take-up of broadband social tariffs had more than doubled in the past six months – rising from 55,000 to 136,000 – but only 3% of eligible households had signed up. That leaves 97% of those eligible missing out on average annual savings of about £144 a year.

Crucially, customers on these deals do not face the prospect of price rises mid-contract either, meaning the cost is effectively frozen.

Since Ofcom started focusing on this issue in 2020, the number of providers offering social tariffs has increased from two to nine. The regulator is calling for TalkTalk, Shell Energy, EE, Plusnet and Vodafone to all introduce a broadband social tariff as soon as possible.

Ofcom said that until they do, it expected these firms to waive early termination charges for any customer who wishes to switch to another provider’s social tariff.

Ofcom also urged Virgin Media to strengthen its support by offering a superfast social tariff – it only offers 15Mbps at the moment.

New protections for people in debt

Ofcom has also introduced new guidance on how firms should support customers in debt or struggling to pay.

It said providers should rotate between a range of communications channels – such as letters, email, phone and text – to increase the chances of reaching customers in debt to offer support.

The regulator also said that restricting the services of someone who is particularly reliant on them should be avoided or limited, while disconnection should only ever be a last resort.

Lindsey Fussell, Ofcom’s networks and communications group director, said: “It is essential that the industry puts its customers first, and focuses on what more it can do to help support them.

“This includes a much stronger emphasis on offering and promoting social tariffs, as well as thinking carefully about whether significant price rises can be justified at a time when the finances of their customers are under such pressure.”

Matthew Upton, director of policy at Citizens Advice, said: “Social tariffs could be a lifeline for those struggling most with mobile and broadband bills, but millions are missing out on saving £144 each year.

“The cost-of-living crisis is only gaining pace, while the number of people struggling to afford their telecoms bill has doubled over the last year. Firms must stop dragging their heels and do more to help people move onto social tariffs.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week