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How to beat the great broadband price rise

Broadband
Broadband

If you look at your broadband contract, you might find an unpleasant surprise buried in the small print. Most big-name providers include a clause that lets them raise their prices every year, generally by a few percentage points above the rate of inflation.

Without a cost of living crisis, this might have passed you by. But it is hard to ignore when the Consumer Prices Index reaches double digits. According to calculations by Hyperoptic, a broadband company, the average yearly bill will soar by around £50 from next year.

This should amount to a £1.4bn windfall for the six biggest providers – and will hammer the 29 million customers that rely on them.

Hyperoptic estimated the biggest burden will fall on BT users, with the average bill soaring by £66 a year. Shell’s customers face a more modest increase of around £37. Both companies did not respond to a request for comment.

Vodafone, whose users’ bills are likely to increase by an average of £48, said it was “too soon to comment on next year’s figures”, but pointed to its “rising operational costs” and claimed vulnerable households would not see price rises. It is estimated that Virgin customers will have to pay £56 more next year, but the firm said it had not announced any increases for 2023.

Hyperoptic forecast that Sky customers will have to pay £43 more across TV and broadband packages, which went up by 4.9pc on average this year. Sky did not respond to a request for comment.

But there are ways to not get caught out – here’s how to cut down your bill.

Read the small print

According to a recent survey, half of broadband users would not have signed up for their current deal if they had known about price increases. But there may be a way out: Ofcom rules state that you can leave without paying termination fees if this is not clearly set out.

When you sign a contract, keep an eye out for anything about mid-term rises. BT, TalkTalk, Vodafone and Shell do this by pegging their bills slightly above the headline inflation rate. Some, like Virgin and Sky, raise theirs without explicitly linking to inflation. Others rule this out altogether.

Shop around

But this is just one of the areas you need to be aware of as a broadband customer. Another is the way that providers penalise long-standing, loyal customers. Ernest Doku, of comparison site Uswitch, said: “There’s certainly a loyalty penalty for a lot of those legacy customers who are on older deals. There are significant savings to be had by looking elsewhere.”

Keep an eye out for time-limited deals. In September, Sky ruled out mid-contract rises on 18-month contracts – although this offer has since expired.

Look for smaller providers

According to Ofcom, those switching providers can save an average of £110 a year. And don’t assume that a bigger name is always better; look at deals from smaller companies such as Gigaclear and Community Fibre.

“It is a really exciting time in the broadband space for consumers to get hold of better deals,” Mr Doku said. “A lot of these less well-known providers offer incredibly deep discounts to attract people as they’re starting to gather pace.”

The only potential issue is that these companies do not have the broadband infrastructure to rival the Big Six, meaning availability is something of a postcode lottery.

There is also a perk available to the 4.2 million households on Universal Credit. These social tariffs can save £144 on annual bills – although just 1.2pc of eligible customers make use of them.

Reader Service: Compare broadband deals with Telegraph Compare