Millions of people are facing a £210 a year rise in the cost of their mobiles because of a deal that allows phone giants to increase their prices by 17 per cent mid contract. The extra charges, which come into effect in April, will vary by provider. Some will put up their prices in line with the Consumer Price Index (CPI) plus 3.9 per cent on top, which on figures released this week could mean a 14.4 per cent rise.
But others will use the inflation measure the Retail Prices Index. This is usually much higher and could lead to contract price hikes of 17 per cent. A household money-saving firm has developed a free online calculator at nous.co/mobile-hikes which allows people to find out exactly what new charges they will face in two months’ time.
The online tool from Nous.co allows you to input your monthly costs and who provides your mobile services to calculate what your new repayments will be and how that affects total household finances. Currently the average mobile bill in the UK is £25.62 a month. For a typical family household of mum, dad and two kids, with four mobile contracts, a rise of 17 per cent that means an increase of more than £17 a month and almost £210 a year.
Consumer champion Greg Marsh, founder and CEO of Nous.co, said: “These types of in-contract price rises are nothing short of licensed robbery by the phone giants, with poor customers the losers. How Ofcom ever agreed to allow this sort of RPI-based rise plus a big lump on top is mind-boggling.
“When inflation was running at around 3 per cent, while this was a ruse, it wasn’t quite so dire for customers. But now we are looking at serious increases, which makes this behaviour by large phone companies egregious.
“Even if inflation falls over the next 12 months (which is far from certain) by the end of this year, mobile costs will be set based on a rate nearly three times that. And many people are now locked into contracts of up to 24 months.
“It’s important, especially in the midst of a cost-of-living crisis, for households to know exactly what increased costs they are facing and also when they might be able to get out of their contracts and hopefully shop around for a better deal.”
