Ofcom: Millions missing out on broadband savings
February 15, 2022
By Colin Mann
Millions of families under pressure from the rising cost of living could each save £144 (€172) on their annual broadband bills, UK comms regulator Ofcom has found.
Special discounted broadband packages – sometimes known as ‘social tariffs’ – are available to an estimated 4.2 million households in receipt of Universal Credit.
But only 55,000 homes have taken advantage of these discounted rates so far – just 1.2 per cent of those eligible. That means that millions of benefits 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-£20 a month for broadband speeds ranging from 10Mbit/s to 67Mbit/s.
Ofcom is now calling on all other broadband firms to support struggling households by introducing their own social tariffs. It also wants to see all companies promote these deals more widely, and make sure it is swift and simple for customers to sign up.
Financial relief
Around 1.1 million households (5 per cent) are struggling to afford their home broadband service, Ofcom’s report on affordability finds today. That rises to around one in 10 among the lowest-income households. Affordability problems are likely to worsen in 2022 due to retail price increases and the wider squeeze on household finances, putting further pressure on those who can least afford it.
Social tariff and universal credit statistics
But switching onto a social tariff could provide some 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 per cent of their monthly disposable income. A £15 social tariff would almost halve their broadband costs and use up 4.6 per cent of disposable income.
But customers left in the dark
Despite the savings to be made, Ofcom’s research shows that the vast majority of benefits recipients (84 per cent) are unaware of social tariffs, and take-up is extremely low.
Ofcom has seen limited evidence of providers actively promoting their social tariffs to eligible customers. These deals don’t generally feature in broadband advertising or price comparison website searches.
Providers must step up to support struggling households
To address this problem and ensure that customers on lower incomes can benefit from reliable broadband at a more affordable cost, Ofcom is urging providers to:
- Offer a social tariff. While many are doing so, companies which still do not include EE, Plusnet, Shell, Sky, TalkTalk and Vodafone.
- Promote discounted deals. Any communications with customers about price rises should also include details of available social tariffs. Providers should also consider partnering with local authorities and consumer advice agencies to spread the word.
- Make the information clear. Details on social tariffs should appear prominently on websites and include clear information about who is eligible.
- Make it easy to sign up. Broadband companies should review their application processes to make sure they are easy to follow. Customers must not be put off applying for a social tariff by making it hard to prove they’re eligible.
“People rely on their broadband for staying in touch, working and learning from home,” noted Lindsey Fussell, Ofcom’s Network and Communications Group Director. “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,” she confirmed.
“Vodafone’s broadband is already priced below Ofcom’s threshold of a ‘social tariff’ – at £18 for Superfast 1 and £19 for Superfast,” said a Vodafone UK spokesperson. “We also don’t require customers to meet any specific criteria to get these great prices; our plans are available to all families.”
A BT spokesperson said: “Home Essentials makes access to fast, reliable broadband more affordable for those who need it the most, including the estimated 4.6 million households who receive universal credit and is now available on the High Street.”
BT says it remains committed to supporting customers on low-incomes or facing financial hardship and will therefore be freezing prices for customers on Home Essentials, BT Basic and Home Phone Saver. It also has a number of additional measures in place for customers experiencing financial difficulty including Vulnerability processes and policies to support those who require additional support in paying their bills either on a temporary or permanent basis