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UK broadband users fork out £1.5 billion a year for inflated out-of-contract charges as prices rise 38% in just five years

Written by Ewan Taylor-Gibson

9 February 2017

  • Out-of-contract prices have increased by 38% for copper and 19% for fibre broadband while **in-contract prices have barely changed since 2011 – meaning those who don’t move once their contract ends are paying through the nose**

  • Line rental has increased by an inflation-busting 37% in five years, with broadband users now forking out £216 a year – £58 a year more than in 2011

  • Broadband bill payers languishing on expired contracts are overpaying by £105 a year while fibre customers are missing out on average annual savings of £79

  • With BT and Sky having just announced broadband price rises, Uswitch.com encourages anyone mid-contract to take advantage of introductory deals by using the 30-day loophole.

Broadband users whose contracts have now expired are unnecessarily forking out £1.5billion a year due to the massive difference between in-contract and out-of-contract pricing by UK broadband providers, according to new research from Uswitch.com. Consumers languishing on now-expired deals are paying, on average, £105 a year more than those who are still in contract. Meanwhile, fibre broadband customers who are out of contract are missing out on average annual savings of £79.

While in-contract prices have barely changed since 2011 – by just £1.12 for copper broadband and 54p for fibre – out-of-contract prices have increased by 38% for copper and 19% for fibre. This means those who don’t move to a new provider or sign up to a new deal once their contract ends are paying well over the odds.

Table 1: Changes to the combined cost of ADSL/copper and fibre broadband plus line rental between 2011 and 2016, both in and out of contract:

ADSL October 2011ADSL October 2016Fibre October 2011Fibre October 2016
Average in-contract price per month for broadband + line rental£19.50£20.62£28.07£28.61
Average out-of-contract price per month for broadband + line rental£21.34£29.41£29.65£35.16

Source: Uswitch.com

Meanwhile, line rental – which advertising guidelines now state must be included as part of the overall price when you buy a new broadband contract, yet is itemised separately on most bills – has increased by an inflation-busting 37% in five years. Based on the average price of line rental across the six biggest providers, broadband users are now forking out £216 a year for line rental, which is £58 a year more than in 2011. The priciest line rental is currently BT at £18.99 per month.

Table 2: Increases to monthly line rental between 2011 and 2016, across the six biggest providers:

Broadband providerMonthly line rental Oct 2011Monthly line rental Oct 2016£ increase% increase
BT£13.90£18.99£5.0937%
EE£12.75£17.50£4.7537%
Plusnet£11.99£17.99£6.0050%
Sky£12.25£17.40£5.1542%
TalkTalk£13.80£17.70£3.9028%
Virgin Media£13.90£17.99£4.0929%
AVERAGE£13.10£17.93£4.8337%

Source: Uswitch.com

*Prices correct for customers paying by monthly direct debit

Less than a month into 2017, two broadband providers announced significant price increases. Sky will up its line rental price by 9.1% from £17.40 per month to £18.99 per month from 1st March onwards, bringing it in line with BT’s charge, while BT has announced a raft of increases across its broadband, TV and BT Sport packages. Some of these will come into effect from 2nd April.

Ewan Taylor-Gibson, broadband expert at Uswitch.com, comments: “A combination of soaring line rental costs and out-of-contract pricing has really hammered broadband users over the past five years. The good news is you don’t have to put up with it.

“First, check your bill and make absolutely sure you’re still in contract, because anyone who isn’t is likely paying through the nose. Most broadband contracts are 12 or 18 months long, so if you’ve not moved in the past year, you might well find you’re out of contract and paying, on average, 38% more than everyone else.

“Second, play the system by taking advantage of a loophole, which gives you the right to cancel your contract and move to a new provider without penalty when prices are raised. The deal is you must let your existing provider know within 30 days from the date you’re notified of the increase. This includes price rises to both broadband packages and line rental. Doing this will give you early access to cheap introductory deals, typically reserved only for new customers.”

Find out how you could save over £1,000 a year with Uswitch here.

FOR MORE INFORMATION

Claire Jones

Phone: 020 7148 4663

Email: Claire.Jones@uswitch.com

Twitter: @uSwitchPR

Notes to editors

  1. See table 1 above. Out of contract: 38% is the increase between £21.34 and £29.41 and 19% is the increase between £29.65 and £35.16. In contract: £20.62 - £19.50 = £1.12 and £28.61 - £28.07 = 54p

  2. See table 2 above. £4.83 x 12 = £58 annual increase

  3. Based on price tracking of ADSL and fibre packages available in October 2011 and October 2016 across the 6 biggest broadband providers. Average in-contract and out-of-contract pricing can be seen in table 1 above. Copper/ADSL price difference for 2016 is £29.41-£20.62 = £8.79 x 12 months = £105.48. Fibre price difference for 2016 is £35.16-£28.61 = £6.55 x 12 months = £78.60.

  4. BT has announced a raft of price hikes to broadband, TV and BT sport - effective from 2nd Sky is increasing line rental from £17.40 to £18.99 per month, effective from 1st March

  5. com surveyed 2,002 nationally representative UK adults aged 18+ via Opinium. Data was collected 11-15 November 2016. Our results have been weighted to nationally representative criteria. All respondents were asked: ‘Have you ever changed your internet broadband provider?’ 35% have never changed, 22% switched more than 5 years ago, 12% switched 3-5 years ago, 16% switched 1-3 years ago, 11% switched within the past 12 months, 4% said not applicable as they don’t have broadband in their household. To calculate this figure, we took the 69% who have either never switched, or not switched within the past three years, as these respondents would definitely be out of contract. According to Ofcom, 78% of homes, or 22.5 million, have internet access. 69% of 22.5 million = 15,525,000 According to Ofcom, 31% of homes, or 9.1 million, have now chosen to take up superfast broadband, so we can assume that of these 15,525,000 homes, the breakdown is 4,812,750 with fibre, 10,712,250 with copper connections.

Fibre broadband customers whose contracts have expired are overpaying by £78.60 a year ADSL or copper broadband customers whose contracts have expired are overpaying by £105.48 a year. Calculation: 4,812,750 x £78.60 = £378,282,150 10,712,250 x £105.48 = £1,129,928,130 £378,282,150 + £1,129,928,130 = £1,508,210,280

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