TalkTalk has confirmed a major shake-up coming to all broadband customers — and it kicks in this month. Following Ofcom’s decision to ban mid-contract price rises linked to inflation, a slew of internet suppliers have announced new proposals for “pounds and pence” annual rises.
Starting from August 12, anyone who signs up for TalkTalk broadband will see their monthly bills increase by £3 a month from April 2025. If you’re paying £26 — the average monthly bill for broadband customers nationwide, it will rise to £29 a month next year.
That equates to an 11.5% increase. For comparison, the annual price rises from TalkTalk earlier this year, which relied on the now-banned practice of using the Consumer Prices Index (CPI) inflation data plus 3.7%, resulted in a 7.7% hike — much less than the system that now replaces it.
TalkTalk contracts usually come with a 24-month minimum term, so you can expect to see at least £3 increases during your tenure.
It’s not just those who sign up as a brand-new customer, existing TalkTalk customers who renegotiate their existing deals to unlock a new offer will be signed up to these new “pounds and pence” terms too.
If you signed up with TalkTalk broadbandbefore August 12 and have made no changes, you’ll continue with the old CPI-based system. As such, when the next round of price hikes comes around in April 2025, we could see some dramatically different price rises for TalkTalk users. If you’re out of contract, you can switch to another deal with the same provider or leave for another offer somewhere else without facing a penalty.
TalkTalk offers job seekers six months of free broadband through its partnership with the Department for Work and Pensions. Additionally, the internet firm says its most financially vulnerable customers will be excluded from its annual broadband price rise schemes.
Discussing the change, which mirrors the new “pounds and pence” price hikes outlined by BT, TalkTalk CEO Susie Buckridge said: “For more than 20 years TalkTalk has focused on delivering value for customers. We remain fully committed to providing great value broadband and ensuring our customers have a clear understanding of the price they will pay throughout their contract.
“We will be moving away from an inflation-linked annual broadband price rise to a flat increase following Ofcom’s new guidance. We believe this will help improve transparency and consumer understanding of the change.”
Under the new rules issued by Ofcom, all telecom providers will need to detail increases in black-and-white in all new contracts for landlines, mobiles, and home broadband from January 17, 2025. TalkTalk is working towards full compliance with Ofcom’s new guidance ahead of the January deadline.
Reacting to the pricing shake-up, Which? Director of Policy and Advocacy Rocio Concha said: “Which? led the campaign for a ban on unpredictable mid-contract price hikes by telecoms providers so it’s positive news for new and re-contracting TalkTalk customers that they will be getting more certainty about pricing.
“Telecoms providers still including these unfair mid-contract price hikes in contracts should put an end to these practices as soon as possible rather than waiting for the regulator’s January ban to take effect. Providers should also ensure any price increases are justified and set competitively.”
Ofcom analysis conducted in the consultation period for the price rise ban revealed that four in 10 broadband customers in the UK were on inflation-linked contracts last year. But despite the prevalence of these broadband plans, Ofcom found that most customers had very little knowledge of the exact details.
Just 16% of broadband customers surveyed by Ofcom knew their monthly bills could rise, and that any increase would be linked to inflation with an additional percentage added on top. And even when people did actively consider future inflation-linked price rises when choosing a contract, they did not understand them fully and found it tough to estimate the exact monetary impact, Ofcom research found.
Ernest Doku, telecoms expert at Uswitch.com comments on TalkTalk’s change that from 12th August all new contracts will include details of “pounds and pence” cost increases: “Following Ofcom’s new rules that broadband and mobile mid-contract price rises must be set out in pounds and pence, TalkTalk has become the latest provider to adopt a flat-rate approach to price increases.
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“From the August 12, new and recontracting TalkTalk broadband customers will see the monthly amount they pay increase by £3 annually in April. This is in line with the new annual price rises set out by BT/EE, Vodafone and Plusnet for their broadband customers. While it is important that any price rises are known at the point of taking out a contract, and that we move away from unpredictable inflation-linked increases, a flat-rate model across all packages will be harsher as a proportion for many customers who are on cheaper or average priced contracts.
“It’s disappointing that the providers who have announced their changes in anticipation or following Ofcom’s new guidance have all chosen to apply blanket increases, as this is not the only way to adopt the pounds and pence model. As other providers think about how to respond to the changes in rules come January 2025, we encourage them to consider other models. This could include offering a fixed price throughout the whole duration of the contract, shorter contracts or smaller price increases that are relative to the initial contract cost.”