Martin Lewis, founder of MoneySavingExpert.com (MSE), has warned that mobile and broadband customers could still face mid-contract hikes in their bills. This is despite a new rule banning sudden mid-contract price rises linked to inflation.
Thanks to the new Ofcom rule, broadband mobile and pay-TV firms will no longer be able to hit customers with inflation-linked price hikes halfway through their contract. The current rule means millions of customers face hikes of up to 8.8 percent this year — adding as much as £50 to bills.
Mr Lewis has welcomed the change in the rules, set to be imposed from January 17 next year. However, a loophole in the rule means that annual mid-contract ‘above inflation’ price increases could still take place.
The financial expert explained that the price increases would be a fixed amount, instead of linked to future, as-yet-unknown rates of inflation. This means that prices could still rise by more than inflation.
Mr Lewis urged customers to pay attention to their contracts, as providers will have to set out any rises “prominently and transparently” – in pounds and pence – before the contracts are taken out.
The MSE founder has long railed against mid-contract price hikes, calling them “anti-competitive and inflationary”.
When the Ofcom rule changes were first proposed in December 2023, the financial expert said: “This is a definite improvement, though based on this proposal I’ll be asking it to consider changing it so the rise should always be the ‘lower of CPI inflation or a fixed pounds and pence amount’ so the rises can never be above inflation.”
In a letter to former Chancellor Jeremy Hunt this year, he said any price rises should “not be more than inflation”.
Several mobile and broadband providers have already made moves ahead of the January 2025 change.
Plusnet will apply a flat rate charge for all broadband customers, increasing by £3 each year. Previously they increased by the rate of inflation plus 3.9%.
EE Mobile deals will also rise by £1.50 a month along the same annual structure. This also means an extra £2 for TV customers and £3 for broadband.
There are several providers that do not charge mid-contract price rises, including Voxi, Lebara, Giffgaff, Smarty, Lyca Mobile and Asda Mobile.
Comparison websites, such as MoneySupermarket and Uswitch, are often used to compare the best tariffs and phone prices if customers want to ditch their current supplier when their contract expires, and find the best deal.