Millions of broadband and mobile phone customers can expect to face monthly bill increases of at least 14% from April, experts have warned.
Providers often link their annual price rises to January’s consumer price index (CPI) or the retail price index (RPI). Despite a slight easing this month, both are near the highest they’ve been for 40 years, with the latest CPI at 10.5% and RPI at 13.4%.
BT, EE, Plusnet and Vodafone broadband contracts allowed prices to go up by CPI plus 3.9%. At TalkTalk, it was CPI plus 3.7%, while Shell Energy can add CPI plus 3%. Sky and Virgin Media contracts allow mid-contract price increases but they do not stipulate a pricing formula in the same way as rivals.
BT confirmed an increase this year of 14.4 % – CPI of 10.5% plus 3.9%.
A BT Consumer spokesman said: “With the December 2022 CPI rate now announced, we can confirm our price change will be going ahead on March 31.
“We expect the average customer will see their price rise around £1 per week. This price rise doesn’t apply to all our customers. Over three million customers across our BT Home Essentials, EE Mobile Basics, PAYG, BT Basic, landline-only and Home Phone Saver will have their prices frozen through 2023.
“Although telecoms bills remain a small fraction of total average household spend, we know that everything adds up. We take seriously our responsibility to ensure our services are accessible to the widest group of customers possible through our market leading social tariffs.
“We are balancing our own rising costs due to high inflation and making vital digital infrastructure investments for the UK.”
Broadband expert Ernest Doku, from Uswitch, said: “Millions of mobile and broadband customers will now know the scale of the bill increases they face this spring.
“This means many telecoms customers can expect to see their mobile and broadband bills rise by at least 14% in April.
“Providers are taking different approaches to price rises this year so consumers should pay close attention to their contract terms.”
Although suppliers could withhold part of the increase, consumers can expect announcements about price increases before April.
Companies have to give customers 30 days’ notice of price increases.
Consumer groups are calling on households who are out of contract to use this as a catalyst to move to a new deal.
Mr Doku said: “If you are worried about how these price rises affect you, review the terms and conditions of your contract or double-check with your provider to see what might be in store.
“Consumers cannot predict the scale of these rises when they sign up for a deal, which places all of the risk onto them. We firmly believe providers who impose inflationary increases should allow customers to leave their contract early without penalty, or offer contracts where the price remains fixed for the duration.
“Customers who find themselves facing rises should also be ready to vote with their feet. If you are out of contract on your deal, now is the perfect time to refresh your deal or move to a new provider altogether.
“If you have less than six months left on your contract, you may find it pays to make an early switch. While many providers will charge you an exit fee for leaving a deal early, the cost of your remaining term could be less than you would save by taking out a cheaper offer.
“According to Uswitch data, broadband customers on average can save £162 a year by switching their provider, while customers on pay-monthly mobile deals can save an average of £321 annually by moving their handset over to a SIM Only contract.”
A recent MoneySavingExpert poll revealed a success rate of more than 75% when haggling with TalkTalk, Virgin and Sky, plus “high success rates” at other broadband providers.
An Ofcom spokesperson said: “While Ofcom doesn’t set retail prices, companies must treat customers fairly – particularly during an exceptional period of hardship for many households.
“Our rules are clear: everyone must be told upfront about any future price rises before they sign up, and we’re investigating whether phone and broadband firms are sticking to this.
“We’re also concerned about the transparency of inflation-linked price rises in contracts, and how well they’re understood. We’re examining this issue to ensure customers’ interests are protected.”