Mobile and broadband bills: Martin Lewis issues warning ahead of price hike in April
Customers can expect an increase of up to 17% from next month
Millions of broadband and mobile phone customers face rising bills from April, when monthly bills will see an increase of at least 14%.
That figure could go up to as much as 17%, according to financial expert Martin Lewis, with millions paying more unnecessarily as they will be out of contract.
"A typical bill will rise up to 17% ... that is a monumental amount," he said on The Martin Lewis Podcast on Thursday.
"What's really important on that is 14 million people are out of contract – and that means you are free to move, you're free to ditch, you're free to switch.
"Some of those 14 million people, and this is the bit that drives you mad, they've got a contract that they've paid off for a handset so they're paying 50/60 quid a month, the contract ends, they've paid off their handset but they're kept on the same tariff at 50/60 quid a month.
"And that's one of the reasons some people out there will be on astronomical bills," he added.
With official figures on Wednesday revealing a surprise jump in inflation to 10.4% last month, next month’s price rises will only add to the burden of the cost of living crisis.
Read more: Martin Lewis urges mobile phone users to send two texts to cut costs ahead of April price hikes
Why prices are going up
The rising cost of inflation is the primary cause of mobile and broadband bills going up, as providers often link their annual price rises to January’s consumer price index (CPI) or the retail price index (RPI), which were 10.5% and 13.4% respectively.
How much are prices going up?
BT, EE, Plusnet and Vodafone broadband contracts allow prices to go up by CPI plus 3.9%. At TalkTalk, it is 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 has confirmed an increase this year of 14.4% – CPI of 10.5% plus 3.9%.
When will prices go up?
Broadband providers usually increase their prices around April, and your company should have informed you about the rises already.
However, if you were to switch providers before the April rise, some providers won’t charge you the April price increase so it is worth researching if these will be cheaper.
Watch: UK inflation shoots up unexpectedly as vegetable shortages push up food prices
What can you do about it?
As already mentioned, you may be able to find a cheaper tariff with other providers that will not add the increase to a new customer.
Lewis also urged customers to “do a comparison and find the cheapest package”, providing you are out of contract.
He said: “If you are paying more than £10 a month and are out of your contract, the question is why?
“If you want to stay where you are, do a comparison and find the cheapest package.
“If you’re out of contract, take it to them and say, politely and nicely: unless you give me a better deal then I’m going to have to leave. I don’t want to leave, but I’d like you to match the price.
“If they won’t match the price, then you’ll go through to ‘customer retentions’ as that is where they have the power and authority to retain your custom.”
Lewis also suggested changing SIM cards if you are out of contract, with many offering cheaper monthly prices with more data packages.
To find out if you're still on contract, Lewis said mobile phone owners could send a free text INFO to 85075, which will send them a reply with information about whether they are still on a contract and how long is left it.
Comparison website Uswitch also say that switching providers when a contract is up tends to save up to £162.
What about people on lower incomes?
Broadband firms have been urged to cancel “exorbitant” mid-contract price rises for vulnerable customers less than two weeks before they are due to take effect.
Which? is calling on telecoms firms to “urgently” cancel the hikes for their most financially vulnerable customers and allow all customers to leave without penalty if they face mid-contract price rises.
The watchdog said it was “completely unacceptable that during an unprecedented cost of living crisis, telecoms firms are profiting from those who can least afford it”.
Vodafone has confirmed it is automatically exempting customers it has identified as financially vulnerable from this year’s price rises.
Which? calculated that low-income BT, EE, Plusnet, TalkTalk or Vodafone customers – earning £21,000 or less a year – could see their payments rise by up to £77 a year or an average of £52, paying £431 a year for their broadband or at least 2% of their annual income.
BT customers could also face the highest exit fees of £194.34 if they wanted to leave a year early, closely followed by Plusnet, TalkTalk and EE customers who could face exit fees of £133.12, £122.40 and £116.63 respectively.
TalkTalk has said it will automatically exempt its most financially vulnerable customers but has not specified its criteria for this.
Providers offer social tariffs with fixed prices that are exempt from annual rises.
Which? said the average low-income customer affected by the price rise could save as much as £220.32 – or £18.36 per month – by switching to a social tariff.
Yahoo News UK has contacted Citizens Advice for a comment.