Broadband has proven to be vital: but that’s no reason to pay more | Money


As businesses continue to be run from bedrooms and kitchen tables, and restrictions on life make home entertainment a vital escape, the prospect of a downed broadband connection can be a matter of nightmares.But while the pandemic has confirmed how important it is to everyday life, there is no reason to pay more for the service. A considerable proportion of households – around 8.7 million customers – do so, simply because they haven’t switched to the best options in the market.

Last week, regulator Ofcom, in its latest attempt to get better value, announced new deals with suppliers that will allow customers to be notified of better deals when their contracts end.

So how can you make sure you’re getting the best deal available?

Introductory offers

Typically, when people sign up for a contract, they get an attractive rate based on being new customers. At the end of the initial period, they automatically switch to a higher rate – unless they switch to a better deal or another provider with more attractive prices.

Just two years ago, it was thought that more than 10 million consumers were “without a contract” and paying more than necessary. Many weren’t sure there were better deals to be had or were put off by the idea of ​​swapping out equipment to move to another vendor.

An Ofcom push over the past two years is paying off. Customers are now informed of the end of their contract and what they could save by switching to another rate with the same supplier. Most major suppliers offer the same rates to existing customers as to new ones.

Last September, BT, TalkTalk and Virgin Media said they would automatically cut prices for vulnerable people – those who may have a mental or physical health problem or who have lost their jobs – who leave their contracts. It was announced last week that EE, Plusnet, and Sky will also do the same.

“Overall, people are paying too much and that should hopefully mean fewer people will,” says Natalie Hitchins of Which?

However, despite these changes, some 8.7 million broadband customers are out of contract – 40% of the market according to Ofcom. They pay £ 4.70 more per month – that’s £ 56 per year – than the average customer on a deal with the same provider. But if they were to switch to another provider with the best competitive deal, they could save an average of £ 159 per year, according to comparison site uSwitch.

Why not change?

There is usually little benefit to staying with a provider at the end of your broadband contract, with the “loyalty penalty” being that you end up paying more. Contracts are typically 18 months long, although in some cases there are 12 and 24 month agreements, and at the end of the period you can either move out or be deemed to “sleep” outside of the contract. If you go without a contract, there is usually a price increase by default, which means you are no longer at the most competitive rate.

In general, switching suppliers is much less frequent than with energy or insurance bills. At the heart of this problem is the “rigidity” of broadband accounts that are often tied to television and home phone offerings. Changing one would mean having to modify the others, which would entail more work. Many also view the prospect of having to change gear as a hassle they could do without.

“Broadband providers obviously want to do things to encourage this adherence. One of the things that has come up recently is the fact that most give you an email address, ”says Dan Howdle of comparison site “About 50% of people use that as their primary email address, but of course if you switch to a different provider you lose that. “

But it can be easier than you think …

Before the idea of ​​switching from one supplier to another became mainstream, many customers avoided switching energy suppliers, Hitchins explains. But attitudes have changed and people are now much more used to the idea. Likewise, switching to broadband doesn’t have to lead to a showdown with an obstructive provider that makes you uncomfortable – a lot is possible online.

However, while customers will now be notified of what offers their current vendor will be offering them, if they want to know what else is on the market, they will need to do their own research. This is where the real savings will happen, according to uSwitch’s Richard Neudegg.

“When you look at the market bigger, people can save even more if they are willing to change. Some consumers are concerned because we’ve seen how important broadband has been during the lockdown, ”he says. “But more often than not it’s easier than people think – there might be a new box to plug in, but it tends to be relatively straightforward and most of the time it’s handled by the new one. provider.”

How to do

Switching providers shouldn’t just be about saving money, you can also make sure you’re getting the best speed available in your area. Using a zip code checker will allow you to see which packages and how fast.

Howdle says it’s worth looking for offers that are available for a limited time, used to attract people, often with reward cards or vouchers.

Looking at supplier financial calendars can also be a good way to get a good deal. As they approach the end of the quarter, they try to attract more customers with lucrative offers.

Ofcom’s new measures also mean that the broadband market is now more transparent, says Hitchins.

Ofcom says it will monitor the new changes and report back next year.

“We anticipate a significant reduction in the proportion of those who are in breach of contract both through the implementation of end-of-contract notifications and best annual rates, as well as the pro-active engagement that suppliers are committed to respecting with their vulnerable customers, ”says an Ofcom report.

Where you live and what does it cost

Broadband costs vary wildly and depend on the speed of the connection and its offer with other services, while the choice of provider will depend on where you live. Ofgem research shows that more than six in ten Virgin Media customers are on contract – paying £ 4.30 per month more than the average customer still on contract. Four in five Sky and Plusnet customers are in breach of contract while BT (30%), TalkTalk (25%) and EE (24%) have lower figures. However, EE customers who break contracts pay the most – £ 7.90 more per month – compared to the average bill of other customers.


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