Four million people on Universal Credit missing out on £144 discount on broadband bills

Millions of families are missing out on a £144 saving on their broadband bills as the cost of living bites, Ofcom has warned.

Around 1.1million households are struggling to afford their home broadband service, the watchdog said.

That rises to around one in 10 among the lowest-income households.

Special discounted broadband packages – sometimes known as ‘social tariffs’ – are available to an estimated 4.2million households in receipt of Universal Credit.

But only 55,000 homes have taken advantage of these discounted rates so far – just 1.2% of those eligible.

That means more than 4.1million benefit recipients are missing out on an average annual broadband saving of £144 each.

Currently six broadband providers – BT, Community Fibre, G.Network, Hyperoptic, KCOM and Virgin Media O2 – offer at least one of these specially discounted deals.

These packages are priced at between £10 and £20 a month for broadband speeds ranging from 10Mbit/s to 67Mbit/s.

Ofcom is urging all broadband suppliers to bring in their own social tariffs (Getty Images)

Ofcom is urging EE, Plusnet, Shell, Sky, TalkTalk and Vodafone to support struggling households by also introducing social tariffs.

It also warned that many of these deals don’t feature on broadband advertising or price comparison website searches and many firms don't actively promote them to people who may be eligible.

Switching onto a benefits-linked tariff could provide huge financial relief for eligible households.

For example, a standard commercial broadband package costs an unemployed person claiming Universal Credit an average of £27 per month – or 8.3% of their monthly disposable income.

A £15 social tariff would almost halve their broadband costs and use up 4.6% of disposable income.

Ofcom said broadband companies should also review their application processes to make sure they are easy to follow.

Ministers have long been calling for Ofcom to introduce its own low-cost broadband tariff for the poorest families to help bridge Britain's digital divide.

The tariff would also be eligible for homes with children on free school meals, according to a campaign last year by Commons Business Select Committee chairman Darren Jones.

He said the coronavirus pandemic has highlighted unfairness in the system, with kids from well-off families able to log on for remote school lessons but children from poorer households often priced-out of lessons in lockdown because of expensive internet deals.

But Mr Jones, a former in-house lawyer at BT and who was a consumer rights solicitor in the telecoms industry before becoming an MP in 2015, said short-term fixes did not solve long-term problems.

He told the Mirror: “Temporary uplifts to mobile data and free access to certain educational websites during the lockdown are important, but temporary.

“We need a long-term solution to digital poverty in our country, especially for children who need internet access for educational purposes.

“My Bill merely highlights the powers that already exist in law to introduce a social tariff for broadband.

“It doesn’t ask for new legislation or money from the Treasury. I hope the Government will now get on and take action.”

Lindsey Fussell, at Ofcom, said: “People rely on their broadband for staying in touch, working and learning from home. But for those who are really struggling with rising bills, every penny counts.

“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. We expect companies to step up support for those on low incomes, and we’ll be watching their response.”

Claimants can request an upfront loan on their first payment to tide them over during the five week wait period (Alamy Stock Photo)

What social tariffs are available?

BT Home Essentials: £15 a month, 36Mbit/s, 700 minutes included.

Available to people on: Universal Credit, Income-based Jobseeker’s Allowance, Income-based Employment Support Allowance, Pension Credit Guarantee Credit.

BT Home Essentials 2: £20 a month, 67Mbit/s, unlimited minutes included.

Available to people on: Universal Credit, Income-based Jobseeker’s Allowance, Income-based Employment Support Allowance, Pension Credit Guarantee Credit.

Community Fibre: £10 a month, 10Mbit/s, no minutes included.

Available to people on: Universal Credit, Housing Benefit, and PIP recipients.

G.Network Essential Fibre Broadband: £15 a month, 50Mbit/s, no minutes included.

Available to people on: Universal Credit, Income Support, Pension Credits, Employment Support Allowance and Income-based Jobseeker’s Allowance.

Hyperoptic Fair Fibre 50: £15 a month, 50Mbit/s, no minutes included.

Available to people on: Universal Credit, Housing Benefit, PIP, Income Support, Pension Credits, Employment Support Allowance and Income-based Jobseeker’s Allowance.

Hyperoptic Fair Fibre 150, £25 a month, 150Mbit/s, no minutes included.

Available to people on: Universal Credit, Housing Benefit, PIP, Income Support, Pension Credits, Employment Support Allowance and Income-based Jobseeker’s Allowance.

KCOM Full Fibre Flex: £19.99 a month, 30Mbit/s, includes 20 local calls and 60 mins to 0845/ 0870, with £10 cap each month.

Available to people on: Universal Credit zero earnings, Housing Benefit, PIP, Income Support, Pension Credits, Employment Support Allowance and Income-based Jobseeker’s Allowance.

Virgin Media Essential broadband: £15 a month, 15Mbit/s speeds, no minutes included.

Available to people on: Universal Credit only.