Household bills could increase by 17% this year - but you can avoid the price hikes
Brace for rising mobile and broadband costs this year - but you can keep your bills in check đź’¸
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Millions of mobile and broadband customers could face price hikes of up to 17% this year
Ofcom's new rules require fixed price increases on new contracts, but older contracts may still be tied to inflation
Price rises for most customers are expected to be around 6.4%
Customers can avoid exit fees if their contract has expired and by switching providers
Social tariffs may provide discounted plans for eligible low-income customers
Millions of mobile and broadband customers could see price increases of up to 17% this year, despite new regulations aimed at protecting consumers.
Starting in March, bills are likely to rise as companies are permitted to increase prices mid-contract.
The changes come after Ofcom introduced new rules requiring telecom providers - such as phone, broadband, and pay TV companies - to display mid-contract price rises in pounds and pence.
The previous system of linking price hikes to future inflation rates, often with an additional percentage added, will no longer be allowed on newer contracts, and instead will be replaced with fixed increases.
Price increases on older contracts (signed before April 1, 2024) can still be tied to inflation - but must now be stated transparently, along with the timing of such changes.
What do the changes mean for mobile phone bills?
Customers who signed a contract after April 1, 2024, will see a fixed increase in pounds and pence.
That might sound fair on paper, but applying a blanket price increase to all contracts is likely to result in higher percentage increases for some customers, especially those on lower-priced plans.
Money Saving Expert founder Martin Lewis explained: "If you're increasing everybody's contract by say ÂŁ3.50, people on contracts paying ÂŁ20 a month are paying a massive 16 or 17% increase, someone who is paying ÂŁ40 is seeing 8 or 9%."
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The new rules do not apply to existing contracts, meaning millions of customers with older agreements will still face price increases linked to inflation.
That means that for contracts taken out before April 1, 2024, any price hikes will still be based on a percentage increase - in most cases, this is calculated as 3.9% plus December’s inflation rate.
January's data confirmed inflation for December 2024 sat at 2.5%, resulting in a total bill increase of 6.4%. That means a mobile phone deal currently costing ÂŁ20 a month would rise to ÂŁ21.28 - an increase of ÂŁ15.36 annually.
Note that some providers calculate their rates using that 3.9% benchmark, plus January's inflation rate, which is set to be announced on February 19.
What does it mean for broadband bills?
The rules also apply to broadband bills and contracts, meaning most customers of broadband providers like BT, Plusnet, EE, and Vodafone will see their monthly bills rise by 6.4%.
That means that a broadband contract currently costing ÂŁ30 would increase by ÂŁ1.92 monthly - or ÂŁ23.04 per year.
But, if you recently started a new broadband contract, you may have a fixed annual price increase of ÂŁ3 - ÂŁ3.50 per month instead.
Can I avoid the price increases?
It might be tempting to cancel your mobile phone or broadband contract early in protest at higher fees, or to attempt to avoid the price increases altogether.
But since annual price increases are clearly outlined when you sign a new contract, you'll still need to pay early exit fees if you decide to leave before the contract ends.
To check if you'll incur an exit fee for leaving your mobile contract, text the word "INFO" to 85075. This service is free of charge.
If your contract has expired however, you can switch to a new provider without any charges - something you should definitely look into doing, as you're probably overpaying for your current service.
When switching, consider letting your current provider know you're considering a cheaper deal with another provider - they may offer you a better price to encourage you to stay.
If you're unsure how much time is left on your mobile or broadband contract, you can check your bill or account details, or contact customer service for assistance.
Many smaller providers also offer fixed prices until the end of your contract, and you can avoid price hikes if you qualify for a broadband social tariff.
Social tariffs are discounted plans offered by providers to help people on low incomes or those receiving certain benefits.
These plans typically offer more affordable prices and provide access to essential internet services, helping to bridge the digital divide for vulnerable customers.
To check if you qualify for a social tariff, contact your broadband provider directly - most providers have a dedicated customer service team or a webpage where you can inquire about eligibility.
What do you think about these upcoming price hikes? Will you be making the switch to a new provider, or are you planning to stick with your current deal? Share your thoughts and experiences in the comments section.
