RPI announcement lands Virgin Media and O2 customers with 8.8% bill increase

Background:

Today, the January Retail Price Index (RPI) figures have been announced. Virgin Media and O2 are two of the main providers which link their price increases to the RPI. 

Richard Neudegg, Director of Regulation at Uswitch.com comments: 

“Virgin Media and O2 customers have woken to an early alarm call of an 8.8% price increase affecting their TV, broadband and mobile bills from April.

“While around 36 million mobile users and 11 million broadband users are affected by mid-contract price rises each year, Virgin Media and O2 are two of the few providers to base their price rises on the Retail Price Index (RPI) as opposed to the Consumer Price Index (CPI). This means their 2024 price hikes could be among the highest of all UK broadband and mobile suppliers.

“Most Virgin Media customers will be hit by this increase, following updates to their contracts in 2023.

“O2 customers who joined after 25th March 2021 will also face the RPI increase of 4.9%, plus 3.9% on top. This will affect Pay Monthly tariffs, SIM only tariffs, standard tariffs, mobile broadband tariffs and smartwatch tariffs from April.

“As an example, a Virgin Media customer paying £29 for an 18 month contract will now pay an extra £30.60 per year, and an O2 customer paying £8 per month for a 32GB SIM only deal will now pay an extra £8.40 per year.

“Using future inflation as the basis for a price increase means it’s impossible for consumers to know the scale of their bill change when they sign up for a deal. Ofcom is currently weighing up a new ban on inflation-linked and percentage-based price hikes which, while welcome, will come too late for this round of price hikes.

“If you’re out of contract or coming to the end of your existing mobile or broadband deal, changing providers to a lower cost option could help you offset the April price increases. 

“There are also several providers which do not raise prices mid-contract, such as Hyperoptic and Trooli for broadband, and SMARTY and Lebara for mobiles. So it’s well worth looking elsewhere if you want to avoid unpredictable hikes.”

ENDS

Notes to Editors

1. RPI of 4.9% + 3.9% = 8.8% increase in prices. In the example, a Virgin Media customer paying £29 will see an 8.8% increase to £31.55 per month (equivalent to £378.60 per year). This adds £30.60 extra onto the total per year. In the O2 example, a customer paying £8 per month, could now pay £8.70 per month (or £104.40 per year). The annual increase is £8.40. Today’s RPI is available here. Information on O2’s price increase is available here. Information on Virgin Media’s price increases is available here. The referenced O2 deal is available here. 

Chris Thomas

PR Contractor

v-chris.thomas@rvu.co.uk

About Uswitch 

Uswitch is one of the UK’s top comparison websites for home services switching, including energy, broadband and mobiles. 

More people go to Uswitch to switch their energy, broadband and mobile than any other site, and we have saved consumers over £2.7 billion off their bills since we launched in September 2000.

Free mobile app Utrack also helps households manage their home energy usage and make potential savings. 

Uswitch is part of RVU, a group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.