EE and Virgin Media among broadband providers Britons now pay more for — full list revealed
You may have noticed your broadband bill is slightly higher this year. This is due to most telecom brands increasing monthly Direct Debits by a fixed pound-and-pence rise to comply with recent Ofcom rule changes.
Broadband providers have been banned from tying annual price rises to runaway inflation figures. UK companies are forced to be upfront and to tell you about any price rises included in your contract in pounds and pence. This is a shift away from inflation-based rises, which you simply “cannot predict” ahead of time.
But now three in four people are paying more than they would have been under the old inflation-linked system — according to new research from Money Saving Expert (MSE).
Under the old system, your bill would rise each year by inflation plus a few percentage points – typically 2-4% on top of either Consumer Price Index (CPI) or Retail Price Index (RPI). This meant price rises were tied to the actual cost of living.
Martin Lewis, founder of MSE, said in a statement: "This was frustratingly predictable. Let's be plain, it provisionally looks like the regulator's intervention resulted in most contracts costing more. Transparency only goes so far, we don't want customers overpaying just because they were told about it first.
"So, a simple, 'no rises above inflation' rule seems a reasonable compromise. And our research shows compared to Ofcom's solution, if this had been in place it would've meant lower rises for over 99% of people."
Not sure how much extra you're paying? That depends on the brand that handles your full-fibre broadband, but expect to spend between £36 and £48 extra over the next 12 months for the same connection.
Flat-rate increases also hit budget-conscious customers the hardest.
For example, if you're paying £20 a month and your bill goes up by £4, that's a 20% jump. If you're on a £60 package, the same £4 rise works out at just 6.67%.
BT led the charge with a £3 monthly increase, later bumped to £4 when inflation stayed higher than expected. Other providers quickly followed suit.
Ministers have stated they have "no plans to ban in-contract price rises" for broadband, mobile, and phone services.
Many have been frustrated by the switch. Richard Cameron, CEO of Carlisle-based broadband company Grain, has penned a strongly-worded letter about these price hikes to Science Secretary Liz Kendall, attacking the Government's Telecoms Consumer Charter.
In the letter, he names more than a dozen companies he accuses of implementing above-inflation price rises. You'll find familiar names on the list: BT, EE, Plusnet, Virgin Media, Sky Broadband, Vodafone, TalkTalk, and NOW broadband all feature.
Smaller providers haven't escaped criticism either. KCOM, 4th Utility, CommunityFibre, Cuckoo, Hyperoptic and Rise Fibre are also named as applying these increases.
"This is not in the interests of working people who are struggling with the cost of living," Mr Cameron writes in his letter.
If you've started a new broadband contract since the shake-up, you can expect to see bills increase by a set amount annually. Here's when most providers started to switch to the pounds-and-pence model:
Providers like BT and EE have recently changed their pricing strategy. You can find more information HERE.