Millions of UK homes will soon face another round of massive mid-contract price hikes and there's little they can do to avoid paying more. All of Britain's biggest broadband providers - including BT, Sky and Virgin Media - apply extra costs to bills in the spring with many users facing increases of almost 10%. That's due to Internet Service Providers (ISPs) using the Retail Price Index (RPI) and Consumer Price Index (CPI) to work out how much things should go up by.
Because these figures change on a frequent basis, consumers never know how much more their bills are going to go up by until a few months before the hikes come into force.
Many feel this is unfair especially as the only way to avoid the cost increases is to leave suppliers and move to somewhere new.
That's easy if the current contract has ended but anyone tied into an existing deal will often be hit by big cancellation charges making switching a very expensive option.
A recent study by U Switch confirmed that 85% of consumers think the system is unfair with most believing that they should be allowed to leave their provider for free if they raise their prices mid-contract.
Current rules from regulator Ofcom allow providers to avoid this if they tell customers that annual inflation (CPI or RPI) plus a fixed percentage rise (often 3.9%) will apply - even though customers cannot reasonably predict what inflation might be in the future.
Meanwhile, customers are most concerned by the lack of certainty over how much the price would increase. Right now, CPI stands at around 6.8% with RPI levels at 8.9% - when you then add on the ISPs addition rate some broadband users could see bills increase by over 10%. That would add £6 per month to a £60 bill.
Speaking about the issue, Ernest Doku, telecoms expert at Uswitch.com , said: “We’re calling for an end to the practice of inflation-linked annual price rises in broadband and mobile contracts. With inflation still historically high, it’s never been more urgent for this industry norm to be reformed.
“The inflation-linked mechanic is especially unfair for bill payers as consumers cannot be expected to know exactly how much the rise will be. It’s time for Ofcom to intervene.
“Time is running out to address 2024 price rises. The Retail Price Index (RPI) and Consumer Price Index (CPI) figures are confirmed in January, which is when the scale of the increases will become clear - with provider notifications arriving from March.
“For consumers, we know even an increase of £5 can make a difference, so it’s worth looking ahead and understanding when your contract is coming to an end.
“There are providers out there who commit to never raising prices mid contract - such as Sky Mobile, Giffgaff, Smarty, Voxy, LycaMobile and Lebara, as well as broadband providers such as Hyperoptic and Zen.
“Even if you aren’t ready to switch quite yet, you should make sure you’re up to date on your contract terms and keep your eyes peeled for any communications around anticipated price rises at the start of next year.”