April price hikes linked to inflation banned by Ofcom

You’ll now be told upfront about any increases to your phone, broadband and paid-TV services, as mid-contract price increases linked to inflation are to be banned by Ofcom.

From 17 January 2025, any price increases will need to be set out clearly in pounds and pence when you get your contract. You’ll also be told exactly when any increases will happen.

Currently, many broadband and mobile providers hike their prices each year to combat inflation and rising business costs.

They can do this even if you’ve agreed to a fixed monthly rate for your contract period. It means bills often go up in April by the rate of inflation, plus an additional amount to help companies offset their own rising costs (usually 3.9%).

What will my contract look like under the new rules?

Currently, your contract will look something like this –

• monthly subscription price - £30
• monthly price will increase every April by the consumer price index rate published in the previous December, plus an additional 3.9%

Under the new rules, your contract will look like this instead –

• monthly subscription price - £30 until 31 March 2025
• increasing to £31.50 on 1 April 2025
• increasing to £33 on 1 April 2026

Why is Ofcom changing the rules?

Ofcom says “people need to have certainty about their monthly outgoings” – something that is “impossible” if you don’t know how much you’ll be paying for your telecoms services.

Research by the regulator found most broadband (55%) and pay monthly mobile (58%) customers didn’t know what inflation rates like the consumer price index (CPI) or retail price index (RPI) measure.

They said just 16% of broadband customers and 12% of mobile customers knew contract price rises were linked to inflation.

What will the change mean?

Which? says around 8.4 million households are tied to broadband contracts that increase every April by an amount linked to inflation. This means they pay an extra £221m to providers.

An additional 13.7 million UK adults are also tied to mobile phone contracts that increase in a similar way to the tune of £267m.

We don’t know if there’ll be a cap on how much providers can increase contracts by yet – or how much they’ll rise by – but a ban on inflation-linked price rises could mean more money in your pocket and should certainly make it easier to budget.

BT and Vodafone have already started to make these changes.