Millions of people could be paying an extra £337 a year by failing to switch from broadband deals with sneaky contract terms. Approximately 11 million broadband customers are at risk of overpaying on their broadband deals due to mid-term price hikes written into their contracts. These price hikes typically occur around April each year and can lead to increased charges based on inflation plus an added percentage, such as Consumer Prices Index (CPI) inflation + 3.9%.
Although providers will be banned from using percentage terms to increase prices starting January 15 next year, customers will still have to pay extra as a result. Many customers are aware of these increases but choose not to switch service providers due to fears of being without broadband during the switch or receiving worse service from a new provider. However, research indicates that customers who do not shop around for deals risk spending hundreds of pounds more than necessary.
Those who do not switch their contracts are losing an average of £28 per month or £336 over 12 months. For example, customers paying £25 for a service in April 2023 saw a 14.4% increase due to mid-term price hikes, adding £3.60 to their monthly bill or £43.20 annually. In April 2024, their bills increased by a further £2.26 per month. Some smaller providers do not include mid-contract price rises, offering potential savings for customers.
Switching to providers such as Hyperoptic, Trooli, Cuckoo, and others listed above could help customers save money. Additionally, smaller providers often offer faster speeds at more affordable prices and have high customer satisfaction ratings. Before switching, it’s essential to read and understand the terms and conditions of the new contract, research the provider, and ensure the deal meets your needs.
According to broadband expert Sabrina Hoque, switching providers can save an average of £179 over an 18-month period. It’s advisable to explore different packages available at your address to find the best deals. Regulator Ofcom is introducing new rules in January 2025 mandating that telecoms customers be informed upfront about any price rises in their contracts in pounds and pence.
Customers can leave their contracts if prices go up, depending on the terms and conditions. Complaints about mobile or broadband services can be directed to the Communications Ombudsman, and switching providers can be done through comparison sites like USwitch, MoneySupermarket, and MoneySavingExpert.com. Additionally, customers struggling to pay for their phone or internet can contact their provider to inquire about cheaper deals or potential exit fees for switching.