By Colin Mann
February 15, 2022
Millions of families under pressure from the rising cost of living could each save £144 (€172) on their annual broadband bills, Ofcom, the UK communications regulator, has found.
Special discounted broadband packages – sometimes called “social tariffs” – are available for around 4.2 million households benefiting from universal credit.
But so far, only 55,000 households have taken advantage of these reduced rates, or just 1.2% of those eligible. This means millions of 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 offers. These plans cost between £10 and £20 per month for broadband speeds ranging from 10Mbps to 67Mbps.
Ofcom is now calling on all other broadband companies to support struggling households by introducing their own social tariffs. He also wants to see all companies promote these offers more widely and ensure customer sign-up is quick and easy.
Around 1.1 million households (5%) are struggling to afford their home broadband service, according to Ofcom’s Affordability report today. This rises to around one in 10 among the lowest income households. Affordability issues are expected to worsen in 2022 due to rising retail prices and increased pressure on household finances, which will put additional pressure on those who can least afford it.
Social tariffs and universal credit statistics
But switching to a social tariff could bring some financial relief to 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 social tariff of £15 would almost halve broadband costs and use up 4.6% of disposable income.
But the customers left in the dark
Despite the savings to be made, Ofcom research shows that the vast majority of recipients (84%) are unaware of social tariffs and that their use is extremely low.
Ofcom has seen limited evidence of providers actively promoting their social tariffs to eligible customers. These offers are usually not found in broadband advertising or searches on price comparison websites.
Suppliers must step up their efforts to support struggling households
To address this issue and ensure that low-income customers can enjoy reliable broadband at a more affordable cost, Ofcom is urging providers to:
- Propose a social tariff. While many do, companies that still don’t include EE, Plusnet, Shell, Sky, TalkTalk and Vodafone.
- Promote discount offers. Any communication with customers regarding price increases should also include details of available social rates. Suppliers should also consider partnering with local authorities and consumer advice agencies to get the message out.
- Make the information clear. Social rate details should appear prominently on websites and include clear information about who is eligible.
- Make registration easy. Broadband companies should review their application processes to ensure they are easy to follow. Customers should not be deterred from requesting a social tariff by making it difficult to prove their eligibility.
“People rely on their broadband to stay in touch, work and learn from home,” noted Lindsey Fussell, director of Ofcom’s network and communications group. “But for those who are really struggling with rising bills, every penny counts. Special discounts can make all the difference, and too many broadband companies don’t promote their social rate or offer one at all. We expect companies to step up their support for low-income people, and we will monitor their response,” she confirmed.
“Vodafone broadband is already priced below Ofcom’s threshold of a ‘social rate’ – at £18 for Superfast 1 and £19 for Superfast,” a Vodafone UK spokesperson said. “We also don’t require customers to meet specific criteria to get these great prices; our plans are available for all families.
A BT spokesperson said: “Home Essentials makes access to fast, reliable broadband more affordable for those who need it most, including the estimated 4.6 million households who receive Universal Credit and are now available on the High Street.”
BT says it remains committed to supporting customers on low incomes or facing financial hardship and will therefore freeze prices for customers on Home Essentials, BT Basic and Home Phone Saver. It has also put in place a number of additional measures for customers experiencing financial difficulties, including processes and vulnerability policies to help those who need additional help paying their bills, either temporarily or permanently.