Martin Lewis has urged the Government to prohibit mid-contract price increases above the inflation rate following a surge in bills for numerous broadband and mobile customers. Telecom operators are now required to clearly inform customers about the exact amount their bills will rise by in monetary terms. This new regulation came into effect after households experienced price hikes of up to 17% in 2024 due to inflation spikes.
However, a recent study conducted by MoneySavingExpert.com on more than 47,000 tariffs revealed that three out of four customers were financially disadvantaged under Ofcom’s revised system. The analysis indicated that most customers faced price hikes exceeding the inflation rate under the new framework, with social tariff subscribers, who receive discounted rates, being significantly impacted.
According to the MoneySavingExpert analysis, nearly all users with a data limit below 10GB saw a negative impact, while a notable 28% of unlimited data plan subscribers experienced increased costs. In the broadband sector, all individuals on 150MB speed plans suffered financially, with 65% of those on 900GB speed packages paying more.
Customers facing a £2.50 raise in April would typically need to have been spending over £34 monthly to benefit from the new rules, while broadband users confronted with a £4 hike would generally need to have been paying close to £55 monthly.
Earlier this year, Chancellor Rachel Reeves introduced a voluntary Telecoms Consumer Charter, mandating companies to provide upfront clarity on future price alterations. Despite this, Martin Lewis advocates for a complete ban on mid-contract price hikes exceeding the inflation rate. Lewis, testifying today at the House of Commons Public Accounts Committee on broadband, water, and energy costs, emphasized the need for price stability throughout contract durations.
An Ofcom spokesperson expressed support for Martin Lewis’s objectives in ensuring fair pricing for telecom services and indicated plans to conduct a comprehensive review of the impact of pricing transparency rules, with findings set to be released in 2027. The spokesperson highlighted consumer protections facilitating easy switching to better deals and the availability of fixed-price social tariffs for eligible customers as essential safeguards.
Addressing concerns about potential consequences, including the elimination of introductory discounts, the spokesperson cautioned against a complete ban on price hikes, citing benefits to consumers and market competition. For consumers seeking cost savings, the advice is to compare prices online, evaluate current usage patterns for minutes, texts, or broadband speeds, consider switching providers, negotiate for better deals, and explore eligibility for discounted social tariffs, particularly for benefit recipients.