Millions of phone and broadband customers face £276 contract hike this year

Despite energy bills falling this year some household fixed costs continue to increase at an inflation-busting rate, with Brits now paying an eye-watering £14 billion a year for their broadband and mobile phones. People in Greater Manchester are among the worst hit by price rises, with many now paying an extra £17.70 per month simply to get online.

Switching providers has long been among the best ways to get a better deal on your mobile phone or broadband contract, but over half of Brits still remain with the same provider for five years or more, meaning most people are now paying over the odds to stay connected. According to data analysis by Uswitch, those who have been with their provider for over seven years are worst hit, paying 45 per cent more for their phone and WiFi.

This is due to the compound effect of recent mid-contract hikes, adding £15.20 and £7.90 to the average broadband and phone bill in the last month alone. This means telecoms providers will add £276 to the bills of millions of Brits this year, as price inflation in the wider economy drops to 3.4 per cent.

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Inflation-linked price increases during the cost of living crisis have added significantly to many households' fixed costs, with Brits now paying £14.4 billion for their annual broadband and mobile contracts.

Mobile customers across both pay-monthly and SIM only contracts who have stayed with their provider for eight to nine years suffered the most, paying an extra £13.20 on their mobile bill last month - a huge 67 per cent price rise in comparison to the national average price increase of £7.90.

Average amount that mobile bills have increase by since March 2024 according to Uswitch.

Those who switched their mobile provider less than one year ago were the best off, with their increases averaging out at £6.70, or 15 per cent lower than the national average of £7.90.

Sabrina Hoque, telecoms expert at Uswitch.com, said: “An expected Ofcom ban on inflation-linked price increases will be welcome news to consumers, giving them increased clarity on what they'll pay for their contract upfront. But this still doesn’t undo the impact of year on year rises for millions of Brits.

“There are a few different factors in play that contribute to these big variations, especially for those who have been with their provider a long time. A key factor is the compounding effect of annual year-on-year mid-contract price rises, as each year’s percentage increase will be based on a bigger and bigger total. After multiple years, this will really make a difference.

“Improvements in technology also mean even today’s ‘value’ packages across broadband and mobiles offer better value than they did five or ten years ago - so many customers who haven’t switched in many years could effectively upgrade their package but pay the same or less."

Ofcom has announced a consultation on plans to prohibit inflation-linked price rises linked to uncertain future figures, with findings due to be published in spring 2024. While this could offer customers protection from uncertain price increases during their contract, this will only apply to customers taking new contracts once in effect - so customers still within their previous contract will not benefit from these protections.

Uswitch's Sabrina Hoque said: “Customers seeing these price rises can still take action. Most broadband and mobile contracts range from around 18 to 24 months. Your provider will let you know when your contract is about to end, so don’t be tempted to ignore these emails when they come through - it really only takes a few minutes to run a comparison and see what else is out there.

“And you don’t even have to leave your provider - your current provider could have some brilliant new offers available. Don’t fall in the trap of being out of contract, call them up and negotiate a better deal.”