Jan 2024 Inflation Figures Reveal UK Broadband ISP Price Hikes
The Office for National Statistics has published their latest UK inflation figures, which saw the Consumer Price Index fall to 4% (down from 10.5% this time last year) and the Retail Price Index reach 5.2% (down from 13.4%). As a result, we now know how big the annual inflation-linked price hikes will be from most of the major UK ISPs.
At present almost all the biggest broadband, phone and mobile providers tend to base their annual price rises off inflation figures – CPI or RPI – as “published” in January each year (this is actually the rate for December), which is then introduced to consumer bills between March and April of that same year. The exception being Sky Broadband, which sets its own hikes (not inflation linked) and this usually comes in a bit lower than the rest.
For example, BT (inc. EE and Plusnet) and Vodafone all adopt a policy that says their average prices will rise by the level of CPI inflation, as published in January, plus an additional 3.9% (note: it’s 3.7% on TalkTalk and “up to” 3% on Shell Energy). By comparison O2 and Virgin Media adopt the steeper RPI rate, as published in February, plus the usual 3.9% (i.e. we’ll have to wait until next month to know the figure for them).
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Suffice to say, the new CPI rate of 4% means that those providers adopting the CPI + 3.9% policy will shortly be increasing their prices, on average, by 7.9% (down from 14.4% last year). This is obviously a significant fall on last year and is thus much closer to the annual rises that ISPs tended to introduce before the CPI + X% model was even adopted (i.e. in the past ISPs tended to increase their prices by an average of around 4-6% each year).
Take note that such hikes typically apply to the standard monthly rental you pay, although optional paid add-ons and call charges may well increase or even fall by a different measure. The details can vary between providers. Similarly, if you’re still on a legacy contract, then you might be subject to an entirely different policy from this.
Confirmed UK Telecoms Price Hikes for 2024
➤ BT CPI + 3.9% = 7.9%
➤ EE CPI + 3.9% = 7.9%
➤ Plusnet CPI + 3.9% = 7.9%
➤ Vodafone CPI + 3.9% = 7.9%
➤ O2 / Virgin Media= RPI Figure expected Feb 2024 (likely hike of c.9%)
➤ TalkTalk CPI + 3.7% = 7.7%
➤ Shell Energy CPI + 3% = 7% (assuming max of 3%)
➤ Three UK CPI + 3.9% = 7.9%
The good news is that Ofcom recently moved to ban mid-contract hikes that are linked to either inflation, or percentage-based, price rise terms (here). But the regulator’s change won’t arrive in time to impact this year’s hikes (it’s expected to be introduced from late 2024), which BT has already demonstrated with its new pricing policy (here).
Likewise, it’s worth remembering that banning this policy will also increase the risk for providers. Put another way, providers still have to balance that higher risk through their pricing, which could well result in bigger price increases to compensate for greater uncertainty (the longer the contract term, the greater the uncertainty). So Ofcom’s ban won’t necessarily make services any cheaper, only clearer, which is still an improvement as confusion was one of the main problems with the old policy.
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In the meantime, the best way to save money is to vote with your feet and switch ISP (where viable alternatives exist and the terms of your plan allow). But those who are happy with the service they receive, or who perhaps have no other viable options, may prefer to try haggling for a lower price when the hike hits (Retentions – Tips for Cutting Your Broadband Bill), although your mileage may vary – big ISPs are more responsive to this.
Alternatively, there are a lot of smaller ISPs out there that only very rarely increase their prices, if at all, and quite a few of those have kept their prices frozen. In particular, if you’ve recently been covered by a new alternative full fibre (FTTP) network, then the aggressive market competition that exists often ensures that their prices stay low to help drive adoption.
We should add that those who are on state benefits (Universal Credit etc.) may also have the option of taking a cheaper Social Tariff, which is another way to cut your costs – see our article on this: A Quick Guide to UK Social Tariffs – Getting Broadband for £15. But you won’t always be able to access the fastest speeds or most advanced routers / features with such a tariff.
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 and Linkedin.
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If you’re with Vodafone, read the small print on your contract. What appears to be CPI+3.9% isn’t CPI+3.9% at all.
Vodafone have a standard monthly fee for which they apply the CPI+3.9% to, but your in contract payment includes a fixed discount that is applied after this calculation.
What this means is that if you’re in contract with Vodafone your price rise will in fact be more than CPI+3.9%.
A £36 per month service is actually £58 per month service, minus a £22 in contract discount.
7.9% of £58 is a hike of £4.58
The new price of £40.58 is a 12.7% hike on your £36 payment.
I may be wrong, but you seem to be talking about the difference between first term discounts vs post contract pricing? This is more or less the norm for all of the biggest providers. But are you saying that Vodafone will charge the CPI + 3.9% rise to the post-contract price, even if you’re still paying the discounted price within the current term?
Yes. Their contract specifically states the price rise is based on standard monthly plan, which they then define as the full price. Your actual in contract price gets a fixed discount applied from this.
In other words their pulling a fast one with how they market their plans.
Even so, they do typically still work out cheaper than the competition.
Future charges: Each April your monthly plan charge and out of bundle charges will increase by the consumer prices index
(CPI) rate published by the Office for National Statistics in January plus an additional 3.9%. The monthly plan charge is the
amount payable before any discounts are applied and your price increase will be calculated based on that figure.
They then provide an example using last year’s figures.
They use the £58 figure, apply last year’s 10.5% + 3.9% to it to get £66.35.
At that point you take off your in contract discount, which is £22 and fixed for duration of the contract.
They do this so that they can grab the headlines with the initial monthly figure being lower. It allows them to do real terms above face value price hikes, whilst also being able to advertise that their price hikes are in line with competitors.
At face value they might seem to be, but after some digging they clearly are not.
What page is that on? Since it seems to contradict the actual terms of their home broadband and phone packages. The latest version merely says:
https://www.vodafone.co.uk/terms-and-conditions/?ltpn=UK:UCMS:Homepage<sn=footerCome-in<s1=7<s2=2<at=Terms_and_conditions<ad=4873
“Each April, your monthly plan charge will increase by an amount equal to the Consumer Price Index rate published by the Office for National Statistics in January (“CPI rate”) plus an additional 3.9% on top of the CPI rate. We will apply that CPI rate plus 3.9% adjustment from your April bill. In the event that the CPI rate is negative, this will be ignored but the additional 3.9% will still apply“
It is in bold red print on their contracts. The website just lists the basic terms.
I have a contract with them, hence how I know the above.
I also work for a bank, so I’m used to working with numbers and looking for this kind of skulduggery.
What month/year did you sign up? As it may relate to a specific set of past terms.
Hi RightSaidFred,
I agree and confirm the electronic PDF contract does use the wording quoted above, and references the pre-discounted price. However the paper contract sent to me is worded completely differently and does not reference the £58. Have you personally experienced the price rise on the £58 figure in April 2023? Or you are expecting to receive an increase based on the £58 amount in April 2024?
Legally, despite what is said in the PDF, the fact the monthly increase could be higher than 7.9% through not using the discounted rate – something which other users say they do use – as well as Live Chat (I have the emailed transcript) then Ofcom and a Court of Law would side with the consumer, as it is clearly an unfair contract term as Vodafone are being deceptive with how much the plan will increase.
If you have received an increase last year based on the £58 then I would advise you challenge it!
I’ve not experienced the price rise yet, but if they are doing according to their terms and conditions on their website then they clearly don’t know what content they are putting in their contracts.
Obviously, the website version is going to be most beneficial to customers, but if they can’t ensure consistency across all documents then they shouldn’t be trusted.
I’ll post an update as and when they communicate their future prices to me.
the base price for vodafone broadband is impacted by the discount received. if you were paying, for example, a base price of £50 last year with a £25 discount, your base price would’ve increased to £53.60 (14.4% increase last year) instead of £57.20. anyone with vodafone broadband will be able to verify this by checking their feb 23 bill to their june 23 bill
Noting some of the above discussion, the unsurprising lesson here is that you should ensure you understand a contract’s terms before you sign it. If the terms are clear and not hidden, then there really isn’t an issue – if you don’t like the terms offered, look around and find a provider whose offer better suits your requirements.
Providers are available with contract terms that include fixed pricing and no in-contract price increases for both mobile and broadband. In some cases, the monthly charges may be higher than average or there may be a data cap, but choices exist so the onus is on buyers to prioritise their requirements and to find something that matches.
Complaining about openly stated contract terms after you’ve signed up to them is just silly. Obviously, hidden or unfair terms are a different matter.
“Complaining about openly stated contract terms after you’ve signed up to them is just silly. Obviously, hidden or unfair terms are a different matter.”
This risks assuming that everybody is capable of understanding the complex language, nuances and legal impacts of every term inside such contracts, which regulators well understand is not the case, since most people aren’t solicitors. This is also a big part of the reason why the CPI + 3.9% model of price rises has just been banned.
Furthermore, different people will have different views of what is or is not an “unfair term”, thus it is rarely ever truly “silly to complain”. Consumers can and should always dispute anything they have a concern about (silence is the bigger enemy) – regulators / ADR are the ones that will then determine which complaints have merit.
Except when there is a monopoly in your building and you are forced to sign otherwise you can’t do your job. When I moved in my new build, I could only sign 24 months with BT, not even Sky and TT were available. Now I’m paying 45 quid for a meager average 80dl 10ul in the middle of London
@Mark
I agree that regulators are needed to protect us all from unfair terms (in the legal sense, not in the “I don’t like this” sense), abuse of market power etc. On the other hand, I also believe that adults should take responsibility for their own actions and their own decisions rather than being careless on the assumption that someone else will come along and bail them out later. Obviously I’d exclude vulnerable people from this.
@John
If there really are no ISPs available other than BT then you are in a pretty unusual position. Nevertheless, if broadband was so important to you then you presumably found this out before buying
or leasing the property and decided to go ahead regardless. If you now want FTTP and it’s an apartment block (?) then the managing agent or equivalent should be actively approaching network operators to encourage them to deploy to your building.
The sales agent told me they had Hyperoptic
Now when I check Sky website my address is finally on there. I will just ditch BT and maybe take up Sky’s 500mb deal for 33 quid
If a customer is sent two different contracts, and they query it with the company’s customer services, what more can the customer do other than cancel the activation? Why would you support such ambiguity rather than encouraging companies to behave more ethically by being clear and consistent on what price the contract will increase by? That’s all we’re asking here!
“Complaining about openly stated contract terms after you’ve signed up to them is just silly. Obviously, hidden or unfair terms are a different matter.”
Because not everyone has a choice and has to agree to it, like when you sign a virgin media contract knowing it’ll go up by 120%+ at the end of 18 months. Just because they can, doesn’t make it morally right. (nor will I accept the price rise at the end of my contract.)
“I agree that regulators are needed to protect us all from unfair terms (in the legal sense, not in the “I don’t like this” sense), abuse of market power etc.”
Like OFCOM perhaps??? oh I forgot, their purpose it to enable corporate greed not protect the consumer.
In 2nd annual contract with Giganet, monthly cost is same as first years contract and will stay the same until contract renewal.
Just pick the right provider and read the contract before clicking accept.
This is on an Openreach fibre line.
Not for me. I left BT broadband and EE mobile last year for this very reason.!
No in contract price increase for me this year
Virgin Media are offering a bit of a weird one. Prior to this year VM didn’t use inflation they just upped their price whenever they felt like it, but that let you leave your contract without penalty, which gave you bargaining power. From this year they’ve switched to inflation based rises, as noted above, and this can no longer be used as a reason to leave your contract early.
However, they’re already advertising on the members page, that if you have a contract affected by this April’s rise if you choose to upgrade your “main” service now (while keeping the same contract end date), they’ll honour the new price until April 25.
I guess it’s debateable whether it’s worth it, depending on what package you currently have and what the next upgrade tier would cost right now, but there will be some people it might work out well for.