Survey Identifies Reasons for Slow Take-up of Broadband Social Tariffs
A new survey of 2,009 UK people eligible for fixed broadband social tariffs by ISPs (i.e. cheaper packages for those on benefits), which was conducted by consumer magazine Which?, has revealed that 39% of those eligible and aware of such tariffs do not intend to signup due to concerns over slow speeds, existing contracts and other issues.
According to Ofcom, some 29% of UK households (8 million) – double last year’s 15% – are still having problems paying their phone, broadband and TV bills (here). In order to help tackle the cost-of-living crisis, the government and regulator have both been pushing for more broadband ISPs and mobile operators to launch cheaper social tariffs, with many having done so (EE, TalkTalk, Shell Energy and Plusnet have yet to follow).
On the bright side, the take-up of cheaper social tariffs has more than doubled in the last 6-months (from 55,000 to 136,000 homes), but that’s still just 3% of those eligible. In addition, Ofcom noted that almost 70% of eligible customers are still not aware that broadband social tariffs even exist.
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However, even among those who are aware and eligible for such tariffs, the new Which? survey found that there are various reasons why adoption may be lagging. The main reasons cited among this group for not switching include fears about the tariffs being “too slow” (44%), customers still being tied into an existing contract (32%), the deal not being “good enough” (24%) and lacking information (24%).
The issue of speed is a complex one, as it will depend upon what options are available in your area. For example, social tariffs tend to range from Virgin Media’s slow 15Mbps option (available mostly in big cities and towns – although they do also have a 50Mbps plan) to B4RN’s 1000Mbps service (only available in some rural parts of England). Speeds in the range of 36-67Mbps are more common for nationally available packages.
Which? said they were concerned that some broadband providers only offer slower than average connections for social tariffs, but this is hardly surprising as such packages are only intended to be basic fallback options for those who need help and are not designed to replace premium tiers. Broadband ISPs are commercial businesses, not charities, and still need to make a profit in what is an inherently low margins business.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“People who are struggling financially and trying to make savings during the cost of living crisis should not be made second-class citizens when it comes to broadband – which is vital for work, education and family life.
Our research shows that lack of awareness and concerns about slow connections are major factors hampering take-up of social tariffs – so broadband providers need to do more to promote their social tariffs to low income customers and improve their range of options to ensure that these deals fit customers’ needs.
Providers must also make sure people do not have to pay Early Termination Charges (ETCs) to move to another firm’s social tariff. During a cost of living crisis, people should not be left trapped in a deal which does not work for them due to high exit fees.”
ISPA Chair, Steve Leighton, said:
“Broadband bills make up only a small percentage of household spending – but with the cost of living crisis deepening, the sector has responded responsibly and there is now a widespread availability of social tariffs across the UK from many different providers.
The broadband market is very competitive and so there are a range of different social tariffs available, crucially they offer the kind of speeds that enable customers to use broadband for their everyday needs. Our members are actively talking to their customers and are committed to supporting those who are struggling with their finances, ensuring they are aware of everything on offer.
We agree with the need for better consumer awareness of the availability of broadband social tariffs. We would expect to see take up increase as members continue to work closely with government on a series of joint commitments to improve awareness of social tariffs and as industry makes use of the government scheme to verify customers’ eligibility.”
The survey also noted that 63% of eligible households surveyed said they were completely unaware social tariffs exist (similar to Ofcom’s 70%), although happily 51% of this group did say they were likely to switch after hearing about them. As such, awareness remains the key barrier to adoption, much as it has done for the past two years (none of the findings in today’s survey are revelatory).
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On the issue of big ISPs that have yet to launch a social tariff, BT noted that its ‘Home Essentials’ packages were available to customers of Plusnet and EE too – penalty free, but they also added that EE would be launching a social tariff for mobile users called ‘Mobile Basics‘ very soon.
As for Shell Energy and TalkTalk. Shell said they are “looking closely at” the idea of launching one and they also waive early termination charges for customers switching to another provider’s social tariff, but made no solid commitment to do their own. Meanwhile, TalkTalk merely highlighted how it offers jobseekers 6 months of free broadband, which is not comparable to a Social Tariff. Ofcom has said they want both to launch a social tariff.
However, there remains a strong feeling in the industry that the Government needs to do its part too, such as by potentially enabling ISPs to cut Value Added Tax (VAT) on social tariffs from 20% to 5%. But so far there’s been precious little movement on that front and, to be fair, the economy is currently in a pretty dire state. On the other hand, making broadband more accessible helps people to find jobs and save money etc., which tends to feed back into the economy.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Social broadband tariffs should be available to all households. Nobody should be forced to prove their status. It’s not a bonus to get slow cheap broadband. Nobody is bragging about having 50 meg for £19 a month or something, although sometimes I think there is a competition to brag about not affording things these days. I don’t get universal credit and therefore my ISP (Virgin media) doesn’t accept me for reduced cost broadband.
The ISP would keep a customer, the customer gets to remain online at a more affordable price, more capacity for the networks higher tier customers etc. Win win isn’t it? Instead, I’ll be looking at just ending Virgin Media and living with just my phone. It seems crazy to me that they put all these conditions on people. Do they not realise that not everyone on benefits gets UC? Seems they don’t care and are using it to justify the restriction of sale of their lowest tiers.
I agree totally.
The general suggestion is that social tariffs are provided ‘at cost’ (or around that) and with restrictions on how they can be priced. So what value does the ISP get in return for keeping a customer, if there’s virtually no profit to support growth? The government could provide some subsidy to compensate for that, which might work if they actually did it, but otherwise commercial ISPs are not charities.
Agree with Mark, ISP’s don’t receive any help for providing social tariffs, so more than likely the premium connections income / profit needs to subsidise the social tariffs. The more social tariffs services sold, the more needs to be added on to premium services.
brand loyalty. the possibility of upsell later on. Hope that in the future they upgrade? I didn’t realise it was no-profit for them though, I thought even at £12.50 a month for their 50 megabits that they’d be making at least something considering the bandwidth is shared with everyone else connected to that equipment in that area. Of course I have no idea what data transfers actually cost virgin media. I see they’re also trying to get people to include “stream from Virgin Media” when taking out one of these social tariffs so there’s your incentive. Would be nice for the gov to pitch in too. I just don’t see why they can’t offer it to others as well. If not for all households then at least those that get any kind of benefit would be nice instead of UC only.
Isn’t the idea to provide “basic” tier without need for the upsell of all bells and whistles to compensate for the lower price? I’d assume that when struggling with costs of living paying for extra pay TV or streaming should be deemed an avant-garde luxury.
What you said may potentially make sense but sadly I have a feeling that those who go onto social tariff are there to stay (would be interesting to see how many people then migrate back to the commercial tiers). I think in those case a possibly better solution would be for those on commercial tiers who run into temporary struggle to be given a discount for 6 months or up to half of the remaining term.
I agree with @barry. Also, i see the conundrum, ISPs are profit oriented organisations. However what about doing social tarrifs for the social good, just like the way corporations are starting to look at the Green ESG Environment impacts instead doing it for the common good.. It would cost them nothing as im sure it could be structured as some tax write off, whilst at the sametime provide a solution to the Cost of Living problems so many people are facing ATM, through no fault of their own. surely there’s a win/win outcome possible here
Bring back dial up!
What go back to the early 1990s slow snail Internet no thanks .lmfao
Iam sure if they offered a cheap alternative FTTP product it would get more people switching …. saying that, when I was on FTTC I was paying £12 for Sky Broadband because they could apply a hefty discount off the broadband with a promotion they had which would bring my next 12 months in at the exact same price with the tv package going up
I am now on FTTC at £32 with no line rental fees as I am on VOIP on their Sky Talk …. they can do it, if they want
Oops I am not on 500mb FTTP
Oops I am now on 500mb FTTP – I wish we could have an edit option on here. I have carpal tunnel in both hands – so fat fingers all the time
While the idea of social tariffs is a good one I think again it’s poorly done.
Ofcom really needs to have power they are a joke they should be setting rules like packages available say £10 for upto 20mbps £15 upto 50mbps sort of thing and if say someone wanted a 500 or 1000 service you award them a discount % also not allow it to be area based it should be a national thing.
This should be for pension/low income.
Another thing I noticed is landline so far it appears bt are only one who offers a tariff which includes calls. (I checked my area for bt main page claims upto 76mbps but when put in details and my area i know supports these speeds they offer up to 36mbps package only which would be to slow for my family)
I want a Ferrari to drive for my grocery and get to work but can’t afford it. Does it mean that I should get a % discount? No. It means that I will buy a 2nd hand Vectra. The social Tariffs are there to ensure that there is no digital exclusion therefore they should provide minimum viable speeds for distance learning, jobseeking, Internet banking and fair enough – some entertainment (though I wouldn’t expect to be able to stream 4k Netflix on multiple screens). In a way social tariff is a privately funded benefit – and as all benefits should be intended to be temporary (in most cases) and means tested to ensure, that only people who need it get it (avoiding excessive burden on the customers paying the market prices).
There are already plenty of commercial plans that cost an equivalent of 2-3 hours of minimum wage. I really don’t think this is excessive…
S.G says: what you are saying makes no sense and has nothing to do with the subject.
A low income family has requirements how is some of the packages which are something like 10mbs suitable for a whole family it’s not.
maybe you should learn how much wholesale prices are these companies are not losing money.
Benefits are not temp UC is claimed by families which work and many of them so what you going to say well they should advance to be not low income anymore as if its a thing you can do over night.
You clearly do not understand cost of living so run along.
From an education, employment/job search and training context, 15Mbs down and 0.5-1mps up is sufficient, and 36+ is plenty. Those speeds will also allow adequate HD TV streaming. I have basic cheap ADSL2+ with less in a second home and it is OK for WFH (Teams meetings, collaboration websites etc.) Decent WiFi connection is a key part. Sadly there are some places in the UK which still can’t get reliable 10mbs+ service by any means.
Yes 4K streaming/Gaming/Video Content creation needs more, but that’s not necessary for social cohesion and economic betterment, eventually migrating to a higher connection
Contract exit to migrate to social is much more of a problem to solve. If you are accepted onto a social tariff then Ofcom should require that acceptance to be a valid reason to break existing contract with no penalty.
If higher is needed for employment (WFH) then the employer can pay for it, or it can be expensed against the business.