Broadband customers could face bill hikes of £113 in 2023

Some broadband customers could face eye-watering broadband increases in 2023 – with an extra £87 to £113 added to annual bills when compared against the amount they initially signed up for, according to Which? research.

With prices soaring in a range of sectors, we're calling on telecoms firms to put the power back into the hands of consumers and let them leave without penalty if they increase prices mid-contract. Providers must also work harder to support customers impacted by the rising costs of living.

Are you worried about your finances?

Answer a few questions and we'll give you a tailored list of expert advice that will help you manage your finances.

Get started

Broadband providers and mid-contract price hikes

Several major broadband firms, such as BT, EE, Plusnet, TalkTalk and Vodafone, raise prices every April in line with the consumer price index (CPI as published in January), plus an additional 3.9% or 3.7%. 

These price increases are applied to affected customers' bills even if they're within their minimum contract period, leaving them with little choice but to accept them. This is because they're included in the T&Cs – providers have to let you know that your price will rise when you take out a new contract. 

But broadband contracts typically last either 18 or 24 months, so it's difficult to predict what the actual price rises will be when you sign up. 

Many customers also stay on with the same provider after their contract ends, meaning the amount they pay will continue to creep up.

Read 10 ways to save money on broadband and TV bills for more advice on reducing the cost of your service, plus check our latest cost of living news

How much could broadband prices increase?

We've used figures from a nationally representative survey of broadband customers to calculate the potential impact of these price rises in 2023, when the Bank of England predicts CPI will be around 10%. This means consumers face price increases of just under 14% – even higher than this year's increases, which were just under 10%.

Our analysis shows that the average BT customer would face the largest potential increase – an extra £113.07 could be added to their annual bill after the 2023 price rise when compared with the amount they were paying at the start of 2022.

The average EE customer could pay an extra £105.46 per year, and the average Vodafone and TalkTalk customer could pay an extra £92.35 and £90.15 a year, respectively. We found that the average Plusnet customer would see the lowest increase, but it would still add £87.15 to their annual bill when compared against the amount they were paying at the beginning of 2022.

These changes follow significant increases customers already faced earlier this year. We found that the 2022 price increases could have added between £33 and £43 to the average customer's annual bill compared with their original tariff.

Potential impact of 2022 and 2023 broadband price rises

Discover which providers we recommend in our round-up of the best and worst broadband providers

Providers should allow customers to switch away

We're calling on all broadband providers to carefully assess what level of price rise can be justified in the current economic climate, and to allow customers to leave their contract and switch to another provider without penalty if prices are hiked mid-contract.

Providers have cancelled and postponed price rises before. KCOM cancelled its planned mid-contract price rises for 2022, saying it didn't want to add to the burden of rising costs that consumers were already facing. Shell Energy Broadband postponed its 2022 price rises and increased prices a lower amount than it allows for contractually when these did go through.

Two other major broadband providers, Sky and Virgin Media, don't currently employ mid-contract price rises for broadband customers. They still regularly increase prices on an ad hoc basis, but when this happens consumers have the right to switch without penalty. We think the same right should be afforded to customers of providers that factor price rises into their contract.

Meanwhile, a handful of smaller providers – Hyperoptic, Utility Warehouse and Zen Internet – go even further to protect people against inflation. They each commit to keep customers’ prices the same for the full duration of their contract.

If you're out of contract, keep in mind that you don't have to accept any price rise – you're free to shop around the find a better deal. In many cases you'll find that it will save you money, and you may get a better service. But check the T&Cs of any new contract carefully so you're aware of your new provider's policy on price rises.

Broadband should be classed as an essential service

Broadband, mobile phone and landline services have become essential, so we think they should be taxed accordingly. The amount of VAT paid on telecoms (20%) is much higher than that paid on other essential services such as gas and electricity (5%). 

We believe the government should ultimately reduce VAT on telecoms (broadband, mobile and landline) to bring it in line with other essential services. We also believe that no VAT should be applied to social tariffs. 

If the big providers cancelled their planned price rises in 2023 and there was a VAT reduction on broadband bills, customers could save between £102 and £133 as a result, depending on their broadband provider.

Which? calls for more from telecoms providers

Which? wants to see more done by telecoms providers to help their customers through the cost of living crisis and support those who may be struggling to afford their bills. We're also calling on them to:

• Carefully consider what level of mid-contract price rise is justified in the coming year, given current inflationary pressures
• Work to increase awareness of social or discounted tariffs, including clarifying how these differ from commercial tariffs
• Ensure that customers moving to these social or discounted tariffs don't incur additional charges when they are signing up, such as exit fees if they're currently in contract.

Rocio Concha, Which? director of policy and advocacy, said: 'It's unacceptable that many broadband customers are facing price hikes of up to £113 to their bill during an unrelenting cost of living crisis. 

'Customers should be allowed to leave their contract without penalty if prices are hiked mid-contract, regardless of whether or not these increases can be said to be "transparent".

'It's especially important that those who are eligible for social tariffs don't incur any extra charges when moving to discounted tariffs, even if they're currently mid-contract. Providers also shouldn't charge any setup costs for social tariff customers.'

How the providers responded

BT told us that it makes price rises clear when customers sign up for a new deal, and its system means they're expected and consistent. It told us its own figures suggest a smaller average increase for BT and EE customers than those calculated by Which?. It's committed to helping those who need it most and offers a penalty-free move to Home Essentials (BT's social tariff) for eligible BT customers who are struggling financially, extending this to EE and Plusnet customers in the coming weeks.

TalkTalk told us that it disputes our findings and told us that, as the country's largest value provider, it commits to providing affordable and reliable connectivity for everyone.

Vodafone told us it disputes our figures and that its own calculations suggested the price rises had a smaller impact on its customers' bills. It offers affordable mobile and home broadband plans, including a social mobile tariff, and has frozen prices for customers who are registered as financially vulnerable. It noted that while no one wants to see price rises, it also faces rising operational costs and the need to invest in its network and services, particularly given the roll-out of 5G and the increasing data consumption of its customers. 

Tech tips you can trust – get our free Tech newsletter for advice, news, deals and stuff the manuals don’t tell you