Millions of households are facing higher broadband bills, courtesy of annual price rises introduced by several of the UK’s major providers.
Earlier in the year Sky, TalkTalk and Virgin Media all announced that they’d be raising prices on some of their deals.
However, several other providers – including the UK’s biggest, BT – are also increasing their prices. But unlike the price rises announced by other providers, these are baked into consumer contracts meaning customers have no choice but to pay them – and they happen annually.
Discover which broadband providers we recommend – read our round-up of the best and worst broadband providers for 2021.
Broadband providers and price hikes
Several of the UK’s big broadband providers have introduced annual price rises – in most cases they base them around the Consumer Prices Index (CPI) rate of inflation as published in January – this year, the CPI was 0.6%.
However, they don’t stop at the rate of inflation, sneakily adding an additional percentage – this is either 3.7% or 3.9% depending on the provider.
Broadband providers’ annual price rises
- BT: CPI + 3.9%
- EE Broadband: CPI + 3.9%
- John Lewis Broadband: CPI + 3.9%
- Plusnet: CPI + 3.9%
- TalkTalk: CPI + 3.7% (from 2022)
- Vodafone: CPI + 3.9%
BT and its subsidiaries all add 3.9% to the CPI, as does Vodafone.
Until recently, TalkTalk was one of a handful of providers that promised to fix its prices, but it changed this with an announcement in March – TalkTalk will begin applying annual price rises from April next year.
What can I do about broadband price rises?
Ofcom rules state that telecoms providers must offer their customers the right to exit their contract penalty free is they surprise them with price rises that are greater than inflation.
But because these annual price rises are part of your contract, they don’t count as a surprise – meaning you have no choice but to pay the new higher price, or to pay an exit fee to terminate your contract.
It means that if you sign up to an 18 or 24 month contract with any of these providers, you can’t only pay attention to the amount that’s being advertised. Depending on the price of your deal, a 4.5% price rise could see you paying an extra £10-20 in the first year and £20-40 in the second.
Also keep in mind that the actual increase will differ depending on that year’s CPI – this year’s was fairly low (0.6%), while last year’s was 1.3%.
Still on a standard broadband contract? Read more about the benefits of fibre broadband, to find out how you could enjoy faster speeds, greater reliability, and cheaper costs.
Which providers fix their prices?
Zen Internet offers a lifetime price guarantee – if you take out a 12, 18 or 24 month contract, it promises not to increase your tariff as long as you stay on the same deal, even if you move house (assuming the deal is available at your new location).
Meanwhile Sky and its subsidiary Now Broadband both have clauses in their contract allowing for price rises. Sky announced it was increasing some prices back in February. However neither it nor Now Broadband apply annual increases across all of their deals.
Similarly, Virgin Media does increase prices on occasion – it increased the price of some of its deals in April. But it doesn’t apply price rises across the board, and didn’t increase prices during 2020.
How to find the best broadband deal
Despite annual price rises now being something to consider with certain providers, you’re still likely to be better off in a fixed term contract than staying out of contract on an old deal.
Providers can increase the price of out of contract customers – plus our analysis has shown that out of contract customers can pay as much as 85% more than those who are in contract.
Concerned about the process of switching? In most cases it’s straightforward and you’ll only have to contact your new provider. Learn more in our guide on how to switch broadband provider.