Worried about the cost of broadband? Ask the provider for a ‘social tariff’
Worried about broadband costs? Ask providers for a ‘social tariff’: Millions of cash-strapped retirees can cut their bills this winter
Millions of cash-strapped retirees facing rising landline and broadband costs this winter can lower their bills by switching to a little-known rate.
Telecom giants are raising their rates by up to 15% in the new year. This is on top of recent increases, with BT imposing an average increase of 8% earlier this year. The average monthly broadband and phone bill is now £40.
But industry regulator Ofcom is demanding that telecoms providers offer cheaper deals to their most discerning customers.
Counting the cost: Industry regulator Ofcom demands that telecoms providers offer cheaper deals to their most demanding customers
This includes the 2.5 million retired people with pension credit – plus another 850,000 who are eligible but not applying. Pension Credit tops up earnings to ensure a single pensioner receives at least £182.60 a week or £278.70 for a couple.
BT, Sky, Virgin Media and Vodafone are among those offering so-called ‘essential’ rates, typically charging just up to £20 a month.
But they stubbornly refuse to promote them so that more people can apply. Details of offers can only be found by rummaging through a supplier’s website or by contacting a supplier directly and asking for details. In addition, the customer must provide proof that he is eligible.
Some providers, including EE and BT-owned Plus Net, don’t offer the deals at all – providers aren’t legally required to. Dennis Reed, of campaign group Silver Voices, said: ‘Older and vulnerable people are particularly dependent on the telephone and the internet to communicate with the outside world – providing a lifeline for lonely people.
He adds: “It is a shame that the telecommunications giants do not publish the social tariffs for the most needy.”
Ofcom says eight million households are already having trouble paying their phone and broadband bills. This is not just to call for increased support for the elderly, but also for other low-income households who depend on benefits for their financial survival.
The regulator says: “Up to 97% of eligible low-income households have yet to take advantage of the special offers available. We ask the industry to promote its social tariffs.
He adds: ‘The cost of living crisis is now putting unprecedented pressure on the budgets of many households.’
Ofcom wants all telecommunications companies to write or email customers who are struggling to pay their bills to let them know that social tariffs are on offer. Currently, no provider does. The regulator has found that 70% of people applying for benefits are unaware of the existence of social tariffs.
James Barford, telecoms analyst at consultancy Enders Analysis, said: “It is perhaps understandable that telecoms companies offering social tariffs are unwilling to spend part of their marketing budget promoting them – because they don’t make them any money. But we expect serious price increases early next year in the broader telephony and broadband market, with many telecom companies using a price increase formula linked to the inflation rate of december. This means that the demand for social tariffs could increase.
BT added 3.9 percentage points to an inflation rate earlier this year to determine its rate increases. It is planned to use this same formula next year. Ofcom found that 29% of households are struggling to pay their telecom bills, almost double the 15% reported last year. Ofcom says anyone who does not benefit from a social tariff, but is eligible for it, should be allowed to switch to it for free – even if they are bound by a long contract.
If a current supplier does not offer a social tariff, a household should be able to switch to a competitor without penalty.
BT says: “We actively promote our ‘essential’ packages if anyone is having trouble paying their bill and contacts us by phone or visits a BT store.” It also says that customers of EE and PlusNet, where social tariffs are not available, can transfer to BT for free.
Customers of BT Home Essentials – its social rate – pay £15 a month for a free landline and internet package. BT customers can expect to pay from £28.99 a month for a similar deal.
Eligibility for social rates varies between providers, but generally requires a customer to provide a national insurance number and details of the benefits received.