Mobile and broadband prices set to soar from April

Millions of mobile and broadband users are set to be hit with inflation-busting price rises in April ahead of new rules that will come into force in days.

From January 17, all telecom providers must display any mid-contract price increases in ‘pounds and pence.’

This replaces the previous system, where price rises were linked to the inflation rate, with an extra 3.9% added.

The change comes after Ofcom banned mid-contract price rises linked to inflation because the process left customers unclear about how much extra they would pay in the future when signing up. It also exposed contracts to financial uncertainty from future inflation, with millions seeing their bills rocket by 17.5% in 2023 after inflation soared.

In recent months, inflation has stabilised, hitting 2.5% in December, which means bills would have increased much less in 2025. And consumer experts now fear that some customers will be worse off under the new system.

Andrew Ferguson, editor of thinkbroadband.com told The Sun Newspaper that someone who pays £24.99 a month for broadband and has a £3 a month rise added to their bill will be paying more than if their price rise was linked to inflation. If their bill increased by 6.5% (based on November’s inflation figure) plus 3.9%, they would pay just £1.62 extra a month.

But it would be better for someone on a more expensive contract costing £59.99 a month. A £3 rise would be cheaper than linking their price increase to inflation, because this would result in an extra £3.89 being added to their bill each month.

When announcing the changes last year, an Ofcom spokesperson said: “Inflation might be low now, but as we’ve seen in recent years, it can be incredibly volatile, and we don’t think consumers should bear that risk. Our recent intervention means customers will have certainty and clarity upfront about the prices they will pay, so they can compare offers and select the best deal for them.  

The new ‘pounds and pence’ rule only applies to new contracts taken out from January 2025. Anyone on existing terms will still see inflation-linked rises this April.

What should you do if you can’t afford mid-contact price rises?

If you can’t afford to pay mid-contract price rises, you can try to cancel your contract, switch providers or negotiate a better deal.

Whether you can cancel your contract mid-term or move to a different provider depends on what it says in your terms and conditions, and you may have to pay an early exit fee.

Check your contract to see what you can and can’t do or speak to your provider and explain your situation. If you’re eligible, they might be able to move you onto their social tariff to help you save money.

What are social broadband and mobile tariffs?

Social tariffs are cheaper broadband and phone packages for people claiming universal credit, pension credit and some other benefits. Some providers refer to them as ‘essential’ or ‘basic’ broadband.

They’re delivered in the same way as normal packages, just at a lower price.

Here’s how they can help:

• They’re cheaper than a regular package, with current prices ranging from £10-£20.
• Most tariffs offer superfast broadband at speeds over 30 Mbit/s – fast enough to keep in touch with friends and family, stream HD films or shop online.
• They’ll cost you next to nothing to set up – if you have to pay anything, it’ll only be a small amount.
• If your provider offers a social tariff, it won’t cost you anything to switch.
• The prices won’t increase mid-contract, so what you agree on is what you pay throughout.
• And it costs you nothing to leave mid-contract.

If your current provider doesn’t have a social tariff, they might let you leave your current contract without paying a penalty to move to another provider who does.

What happens if I fall behind with my broadband or mobile bill payments?

Mobile phone contracts are usually considered non-priority debts because falling behind on payments can lead to your service being cut off, but won’t result in you losing your home or essential service.

If you continue not to pay, your debt might be passed to a collection agency and could result in legal action. Unpaid mobile phone debts could also harm your credit score and affect your chances of being accepted for credit in the future.

If you have fallen behind with payments – either priority, non-priority or both - speak to us. We can help you work out a plan to prioritise payments, negotiate with creditors or find the best debt solution based on your circumstances.