Up to a fifth of UK households have struggled to pay their TV, internet and phone bills in the last year, with some having to cancel services or cut back spending on essentials such as food and clothing to make payments, according to research by Ofcom.
The telecoms regulator’s annual affordability report highlights the rising pressure on household finances, with consumers facing a further inflation-busting increase in mobile, telephone and broadband bills of as much as 10% this year.
“People rely on their broadband for staying in touch, working and learning from home,” said Lindsey Fussell, group director of network and communications at Ofcom. “But for those who are really struggling with rising bills, every penny counts.”
Ofcom warned that with the above-inflation price increases outstripping expected rises in benefits such as universal credit, more than 4m homes are facing the prospect of a further fall in income in real terms.
“This could increase the numbers of households that face affordability challenges in accessing internet services and further increase the challenges of those who already face affordability issues,” Ofcom said. “These challenges could be exacerbated by the wider context of cost of living pressures across a range of essential services (including rising energy prices) during the course of 2022.”
However, the regulator’s research also found that millions of families under pressure from the rising cost of living are not taking advantage of cheaper “social tariffs” offered by some providers to homes on benefits.
Ofcom estimates that 4.2m homes are eligible to move on to social tariffs – offered by seven broadband providers including BT, Virgin Media O2, Community Fibre, Vodafone, G.Network, Hyperoptic and KCOM – which could halve their bills, providing a saving of £144 annually.
According to its research, only 55,000 homes have taken advantage of these tariffs, just 1.2% of those eligible. About 5% of households, 1.1m, are struggling to pay for their broadband each month, the same proportion as face issues paying their mobile bills, Ofcom found.
Ofcom said that while some firms were offering social tariffs they were not actively promoting them to eligible customers in advertising or price comparison website searches.
“Special discounts can make all the difference, and too many broadband firms are failing either to promote their social tariff or to offer one at all,” Fussell said. “We expect companies to step up support for those on low incomes, and we’ll be watching their response.”
BT said that its social tariff, called Home Essentials and priced between £10 and £20 a month, is now being sold in its 550 high street stores across the UK.
Openreach, which builds and maintains the majority of the UK’s broadband network, is incentivising providers to offer social tariffs by waiving the connection fee it charges companies should they connect a vulnerable household.
“While raising awareness plays a large part, there are still too many big broadband providers who are not offering help via social tariffs for their customers,” said Ernest Doku, broadband expert at Uswitch.com. “At a time when the cost of living is soaring for many households, more needs to be done to make people aware of the deals that are available to those customers who struggle the most.”
