Ofcom UK to Publish Take-up of Social Tariffs by Provider

Ofcom has published an update on its action plan to support broadband and mobile customers during the cost-of-living crisis, which once again calls on UK ISPs to take “immediate action” to boost the take-up of cheaper social tariffs (available to those on state benefits) and promises to publish take-up data for each provider.

Back in April 2023 the regulator reported that the take-up of cheaper social broadband ISP and mobile tariffs for those on state benefits had increased to 220,000 households (up from 136,000 six months ago) – here. But that still represents just 5.1% of households on Universal Credit (4.3 million).

One of the ongoing problems here is that many providers still don’t put enough effort into advertising their Social Tariffs, which in an ideal would world appear directly alongside their regular tiers and not on a separate page that may be harder to find. Ofcom and the Government have repeatedly called for improvements in this area to raise awareness, albeit with only mixed success.

The regulator is now summoning representatives from the providers to update on the progress they are making, and will also, for the first time, publish take-up of social tariffs by provider in its annual pricing trends report, due later this year. As part of this, the regulator has now published an open letter to the industry, which sets out what they expect ISPs to do to help raise awareness.

Ofcom’s Expectations for ISPs with Social Tariffs

➤ We expect providers to use their own communications channels to highlight social tariffs. This includes end of contract notifications, and more targeted campaigns, for example social media campaigns designed to raise customer awareness.

➤ Customer service teams should be fully briefed on social tariffs and empowered to suggest them to customers who are struggling with their bill or financially vulnerable. Last year the promotion of social tariffs was added into Ofcom’s guide on fair treatment of vulnerable customers.

➤ Providers should work closely with other organisations, such as charities or local authorities, who are likely to be already engaging with households most in need of help.

➤ Ensure that social tariffs are prominent on their website, for example, by including the social tariff in the list of broadband deals available and placing the social tariff webpage one click away from the home page.

➤ Make social tariff information easy to find in site searches, as well as on third-party websites and through search engines.

➤ Clearly signpost social tariffs from webpages where customers may be looking for help, for example customer FAQs and help pages, and pages aimed at vulnerable customers and those having trouble paying bills.

➤ Use clear language to describe the benefits and protections offered by social tariffs, such as the ability to switch without a termination fee. Highlighting these features is important to overcome any customer perceptions that could act as barriers to take-up, as identified in our September 2022 affordability report.

“We will be monitoring progress on social tariffs very closely. We will publish an update on the availability of social tariffs, take-up by provider and levels of consumer awareness in December,” said Ofcom’s CEO, Dame Melanie Dawes.

However, there is a flip side to all this, which may become more of an issue as take-up grows. The currently low take-up of such tariffs means that they aren’t a huge drag on an ISP’s bottom line, but that could change as adoption rises. Some providers deny this will be a problem, but those taking the moral high ground are often also those with the lowest levels of take-up (i.e. least likely to suffer).

By comparison, BT – an operator that attracts the lion’s share of social tariff users – has warned that such tariffs may eventually become “unsustainable” without more support (here). The risk, if that were to be borne out in reality, is that other customers could end up facing more aggressive price hikes to subsidies those on cheaper plans.

Ofcom’s Cost of Living action plan update also includes preliminary research findings into customers’ awareness and understanding of inflation-linked in-contract price rises. By December, Ofcom will publish the findings of their review into inflation-linked price rise terms, alongside further research on customers’ experiences, and “seek views on whether we need to change our rules“.

What our research has found

➤ In February, we published preliminary research that showed that nearly a third of in-contract customers (31% of broadband customers and 32% of pay-monthly mobile customers) don’t know whether their provider can increase their monthly payment during their minimum contract period.

➤ Our preliminary research also shows that less than half of customers who are aware their provider can increase their monthly payment (41% of broadband customers and 44% of pay-monthly mobile customers) stated that they found out before they started their contract.

➤ Six in ten (58% of broadband customers and 61% of pay-monthly mobile customers) don’t know that CPI and RPI measure the rate of inflation.

➤ Awareness of CPI and RPI is lowest among females, under-55s and the most financially vulnerable.

➤ Those with a disability are more likely to lack confidence in knowing where to look for information on inflation rates.

Finally, a quick reminder – we know social tariffs can be divisive for some, but that is not an excuse to abuse the comment system in order to post offensive remarks toward those who take state benefits. Such posts are against our rules and will be removed.