Mid-Contract Price Hikes Put Millions of Brits at Risk of Phone Bill Affordability

Millions of Brits are facing the risk of being unable to afford their monthly phone bills as mid-contract price increases strain their finances, according to a poll of 2,000 adults.

The survey revealed that nearly one in 10 individuals, approximately five million people, have struggled to pay essential bills since the onset of the Covid-19 pandemic. Moreover, 38 percent expressed concerns that even a slight rise in household or utility bills would lead to financial difficulties, with 14 percent fearing they would be unable to pay a bill altogether.

The findings emerge as certain mobile providers have announced price hikes of up to 4.5 percent for some SIM-only and pay monthly customers starting in April. These increases, linked to RPI (Retail Price Index) and CPI (Consumer Price Index) inflation, are some of the highest recorded and are attributed to rising investment costs to meet growing demands on the network.

Surprisingly, half of the adults surveyed were unaware that a network provider could raise prices during the contract period, despite the industry generating over a billion pounds in revenue from this practice since 2013.

In response, Tesco Mobile, which commissioned the research and guarantees no mid-contract price rises, is urging other networks to reverse their price hikes this year and commit to keeping prices unchanged throughout their customers’ contracts.

Tom Denyard, CEO of Tesco Mobile, expressed concern over the financial impact of mid-contract price rises, particularly during these challenging times. Denyard emphasized that such price increases can negatively affect families, resulting in reduced grocery shopping or increased pressure to pay unexpectedly higher bills.

The study also highlighted a “Digital Divide” influenced by a lack of understanding regarding industry jargon. Nearly half of the respondents (48 percent) were unfamiliar with the term RPI, while over two-thirds were unaware of the meaning of CPI, despite both terms often being used in small print to enforce price increases regardless of the customer’s circumstances. Additionally, almost four in 10 individuals admitted to never reading the small print of their contracts.

Furthermore, 86 percent of respondents believe that providers implementing price hikes should be prohibited from doing so.

Karen Perrier, CEO of the national debt charity and helpline Money Advice Plus, expressed concern over the increasing household debt and the detrimental effect of even a small budgetary adjustment on vulnerable households. Perrier highlighted the essential role of phones and broadband during the pandemic, not only for staying connected but also for purposes such as homeschooling, benefit collection, and accessing support. She stressed the importance of ensuring that people can afford to stay connected and called on networks to reconsider the impact of their actions and the transparency of their contracts.

Perrier added that with the potential for further hardships to come, everyone must contribute to alleviating pressure on the most vulnerable.

Note: This article is based on a survey commissioned by Tesco Mobile.

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