Households are being hit with broadband price hikes of up to 67 per cent when fixed-rate deals end, according to Citizens Advice. The charity warns that older people are most likely to suffer from what amounts to a penalty for loyalty, with annual increases of almost £200.
Citizens Advice analysed deals from BT, Sky, TalkTalk, EE and Virgin Media. It found that a BT 12-month fixed rate of £24.99 per month jumped by 67 per cent to £40.99, costing an extra £198 a year. Sky's £18.99 monthly deal rose by 53 per cent to £28.99, an extra £120 annually. EE's 18-month deal increased by 36 per cent from £21 to £28.50, adding £90 a year, while TalkTalk's 24-month deal rose 28 per cent from £20 to £25.50, costing an extra £66. Virgin Media's price remained unchanged at £32.25.
The average increase across the five suppliers was 43 per cent, amounting to £113 a year. Citizens Advice said customers stay with the same contract for four years on average, resulting in a 'loyalty penalty' of hundreds of pounds. The charity wants providers to be clearer about post-deal costs in advertising and contracts, and to send warnings when fixed prices end.
A survey of over 3,000 consumers found that broadband customers aged 65 were more likely to have been in the same contract for over a decade, and low-income customers were almost three times as likely as high earners to stay for ten years or more. Citizens Advice recommends that Ofcom define vulnerable consumers and explore ways to minimise the impact, including a possible price cap similar to that for energy pre-payment customers.
Gillian Guy, chief executive of Citizens Advice, said: 'Loyal broadband customers are being stung by big price rises once their fixed deal ends. With people staying with their supplier for an average of four years, these extra costs can run into hundreds of pounds.'
