The Worst UK ISPs for Post Contract Price Hikes on Entry-Level Deals

Which? has conducted a new “loyalty penalty” study of entry-level “fibre broadband” and phone bundles across 12 of the biggest broadband ISPs in the UK market. This reveals that customers of Virgin Media, TalkTalk and the Post Office are hit by the biggest price hikes (up to 60%) after their initial contract ends.

The new survey relates to the very common practice of discounting, which exists across nearly all competitive service sectors and is by no means unique to broadband (e.g. Which? does the same by selling a one month trial of their own magazine for £1 and this automatically rises to £9.75 a month thereafter, unless you notify them to stop).

In practice what this means is that the biggest ISPs tend to offer a reduced price for the first 12 to 24 months of a contract term in order to attract new customers, but after this the price will inevitably rise. Sadly existing customers aren’t usually offered the same prices and not all ISPs are clear enough about how much you’ll pay post-contract.

In their latest study Which? examined entry-level fibre broadband and phone deals (conducted on 12th June 2019) from BT, Virgin Media, Vodafone, EE, SSE, Plusnet, Sky Broadband, TalkTalk, John Lewis, the Utility Warehouse and Zen Internet.

Overall it claims that customers signing up to the M50 Virgin Media tariff are at risk of the “biggest monetary hike” at the end of their initial 12-month contract (i.e. an extra £16 a month or £192 over a year if they don’t renegotiate). By comparison Zen Internet and Utility Warehouse didn’t apply any post-contract price hikes, although in fairness their normal prices are often similar to the post-contract prices of the others (Which? didn’t consider this).

In fairness such price offers shouldn’t really be a concern (conversely you could describe the above as showing some of the best discounts), provided the ISPs make their post-contract prices completely clear; ideally right alongside the discounts (some ISPs are better at doing this than others). Equally it’s important to highlight that not all ISPs adopt the same model and many smaller providers, which may offer advanced features (static IP etc.) and better quality, simply charge a set monthly fee that rarely ever changes.

Likewise TalkTalk offers an alternative approach by enabling existing customers to re-contract on to a lower price point than their standard post-contract rate, which is something that Which? might not have been able to reflect if they were only looking at the base post-contract prices.

Otherwise a bit of haggling could save you a fair bit of money (see our Retentions Tips article), although only about 10% of consumers seem to ever do this. Of course if you’re happy with the service then negotiation should be your first port of call before switching.

Ofcom has already moved to resolve such concerns by developing a new system for end-of-contract notifications, although this won’t be implemented until 15th February 2020 (here). The regulator has also started a review of broadband pricing, which is due to be published during autumn 2019 and this could include new measures to help protect the most vulnerable of consumers (e.g. pensioners) who rarely switch.