Fears of slow broadband speeds affecting takeup of social tariffs

Concerns about broadband speed are putting eligible households off signing up for discounted broadband deals, research from Which? has shown.

We surveyed more than 2,000 people eligible for fixed broadband social tariffs to uncover the barriers to signing up. Worryingly, four in 10 of those surveyed who are eligible for and aware of social tariffs do not intend to sign up at all - meaning they could miss out on much-needed discounts.

As part of our cost of living campaign, we're calling on all providers to offer a range of social tariffs to suit every households’ needs and ensure they are properly advertising all their social tariff offerings to new and existing customers. Eligible customers should also be allowed to switch to a social tariff without being charged early termination fees.

Find out which social tariffs are available from providers, and who qualifies for discounted rates in our guide to broadband social tariffs.

Awareness of social tariffs remains too low

Social tariffs are special discounted deals available for certain low-income customers - typically those in receipt of benefits, such as Universal Credit. However, according to Ofcom, the telecoms regulator, only 136,000 (3.2%) out of the 4.2 million households receiving Universal Credit are on a social tariff.

Six in 10 eligible individuals surveyed said they were completely unaware social tariffs exist - with half of this group saying they were likely to switch after hearing about social tariffs.

Both Which? and Ofcom have called for all providers to do more to promote their social tariffs to those who are eligible. Research we conducted earlier this year showed that customers who are eligible could save £250 per year by switching from their current broadband deal to the cheapest social tariff.

When we asked customers who are both eligible for social tariffs and aware of them why they hadn't taken one up, the main reasons cited were fears that the speed offered was too slow, concerns about not being able to leave a current contract, the deal not being good enough, and a lack of information.

Customer concerns about speed

We're concerned that some broadband providers only offer slower-than-average connections for social tariffs, while others still do not offer a social tariff at all - potentially trapping customers who could be eligible for discounted deals on expensive contracts. Providers including EE, Plusnet, Shell and TalkTalk still do not offer their own social tariffs. 

Three widely-available fixed broadband providers - Now, Sky, and Vodafone - currently only offer social tariffs with average speeds of 38mbps or less, significantly lower than the median UK download speed of 59mbps. 

While these connection speeds will work sufficiently for some households, they may not be enough for those with more demands on their broadband - for example, families with multiple people using the internet.

Three widely-available providers - BT, Hyperoptic and Virgin Media - all offer several social tariff offerings at different speeds at various price points. 

• Virgin Media originally only offered a 15mbps social tariff for £12.50 a month. This is significantly slower than its slowest commercial tariff and something Ofcom criticised the firm for several months ago. However, it has since introduced a faster 50mbps tariff for £20, allowing those with more demands on their internet to choose a connection suitable for them. 
• BT offers a 36mbps social tariff for £15 a month and a 67mbps deal for £20 to new and existing customers. 
• Hyperoptic also offers two social tariff options at higher speeds of 50mbps for £15 or 150mbps for £25 to both new and existing customers.

Meanwhile several smaller, localised providers offer high speed social tariffs of 50mbps or more to new and existing customers.

Exit fees could prevent take-up

Customers are generally able to switch to their own provider’s social tariff without paying exit fees on their current contract - although providers are not always as upfront as they could be about this. 

However, people are often asked to pay exit fees to move to another firm’s social tariff mid-contract. This means that customers with providers who do not offer social tariffs (or only offer lower speed social tariffs) could find themselves unfairly penalised for trying to move to a social tariff which better meets their needs. 

BT told us that EE and Plusnet customers would be allowed to move to its Home Essentials social tariffs penalty-free. Shell Energy Broadband also told us it waives early termination charges for customers switching to another provider's social broadband tariff.

During an unrelenting cost of living crisis, all providers should ensure people do not have to pay early termination charges to move to a social tariff - even if they are switching to another provider.

Our analysis shows that broadband customers could face bill hikes of £113 next year – those who aren't eligible for social tariffs may benefit from switching or haggling.

Which? calls for action 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 calling on them to:

• 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.
• Consider providing a range of social tariff options to ensure eligible consumers can choose the right connection for their household's need.
• Carefully consider what level of mid-contract price rise is justified in the coming year, given current inflationary pressures, and enable consumers to leave their contract without penalty when prices are increased mid-contract.

Rocio Concha, Which? Director of Policy and Advocacy, said: 'People who are struggling financially and trying to make savings during the cost of living crisis should not be made second-class citizens when it comes to broadband - which is vital for work, education and family life.

'Our research shows that lack of awareness and concerns about slow connections are major factors hampering take-up of social tariffs - so broadband providers need to do more to promote their social tariffs to low income customers and improve their range of options to ensure that these deals fit customers’ needs.

'Providers must also make sure people do not have to pay early termination charges to move to another firm’s social tariff. During a cost of living crisis, people should not be left trapped in a deal which does not work for them due to high exit fees.'

Read more about our research: Broadband social tariffs: awareness and concerns.