Up to a fifth of UK households have struggled to pay their TV, internet and phone bills over the past year, with some having to cancel services or cut spending on essentials such as food and clothing to make payments, according to Ofcom research.
The telecoms regulator’s annual affordability report highlights mounting pressure on household finances as consumers face another anti-inflationary rise in mobile, phone and broadband bills of up to 10% This year.
“People rely on their broadband to stay in touch, work and learn 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 has warned that with price increases above inflation outpacing expected increases in benefits such as Universal Credit, more than 4 million households face the prospect of a further drop in their income in terms of real.
“This could increase the number of households facing affordability problems accessing internet services and further increase the difficulties of those who already face affordability problems,” Ofcom said. “These challenges could be exacerbated by the broader context of cost of living pressures on a range of essential services (including rising energy prices) during 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 the cheaper “social rates” offered by some providers to households on benefits.
Ofcom estimates that 4.2 million households are eligible to switch to social tariffs – offered by seven broadband providers including BT, Virgin Media O2, Community Fibre, Vodafone, G.Network, Hyperoptic and KCOM – which could reduce half their bills, offering a saving of £144 a year.
According to his research, only 55,000 households took advantage of these tariffs, or only 1.2% of those eligible. About 5% of households, 1.1 million, struggle to pay for their broadband each month, the same proportion as they face problems paying their mobile bills, Ofcom found.
Ofcom said that while some companies offered social rates, they did not actively promote them to eligible customers in searches on advertising or price comparison websites.
“Special discounts can make all the difference, and too many broadband companies fail to promote their social rate or offer one,” Fussell said. “We expect companies to step up their support for low-income people, and we will monitor their response.”
BT said its social fare, called Home Essentials and priced between £10 and £20 a month, is now sold in its 550 high street stores across the UK.
Openreach, which builds and maintains the majority of the UK’s broadband network, is incentivizing providers to offer social pricing by waiving the connection fee it charges businesses if they connect a vulnerable household.
“While awareness plays an important role, there are still too many large broadband providers who don’t offer help via social tariffs to their customers,” said Ernest Doku, broadband expert at Uswitch. com. “At a time when the cost of living is skyrocketing for many households, more needs to be done to let people know what offers are available for those customers who are most in need.”