Millions of low-income families missing out on £144 annual broadband saving
- 4.2 million households could halve broadband bills by taking up special discounted packages
- But low awareness of lower-priced ‘social tariffs’: only 55,000 signed up
- Ofcom calls on all broadband providers to help customers on benefits
Millions of families under pressure from the rising cost of living could each save £144 on their annual broadband bills, Ofcom has found.
Special discounted broadband packages – sometimes known as ‘social tariffs’ – are available to an estimated 4.2 million households in receipt of Universal Credit.
But only 55,000 homes have taken advantage of these discounted rates so far – just 1.2% of those eligible. That means that millions of benefits 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 deals. These packages are priced at between £10-£20 a month for broadband speeds ranging from 10Mbit/s to 67Mbit/s.
Ofcom is today calling on all other broadband firms to support struggling households by introducing their own social tariffs. We also want to see all companies promote these deals more widely, and make sure it’s swift and simple for customers to sign up.
Around 1.1 million households (5%) are struggling to afford their home broadband service, Ofcom’s report on affordability finds today. That rises to around one in 10 among the lowest-income households. Affordability problems are likely to worsen in 2022 due to retail price increases and the wider squeeze on household finances, putting further pressure on those who can least afford it.
But switching onto a social tariff could provide some financial relief for 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 £15 social tariff would almost halve their broadband costs and use up 4.6% of disposable income.
But customers left in the dark
Despite the savings to be made, Ofcom’s research shows that the vast majority of benefits recipients (84%) are unaware of social tariffs, and take-up is extremely low.
We have seen limited evidence of providers actively promoting their social tariffs to eligible customers. These deals don’t generally feature in broadband advertising or price comparison website searches.
Providers must step up to support struggling households
To address this problem and ensure that customers on lower incomes can benefit from reliable broadband at a more affordable cost, Ofcom is urging providers to:
- Offer a social tariff. While many are doing so, companies which still do not include EE, Plusnet, Shell, Sky, TalkTalk and Vodafone.
- Promote discounted deals. Any communications with customers about price rises should also include details of available social tariffs. Providers should also consider partnering with local authorities and consumer advice agencies to spread the word.
- Make the information clear. Details on social tariffs should appear prominently on websites and include clear information about who is eligible.
- Make it easy to sign up. Broadband companies should review their application processes to make sure they are easy to follow. Customers must not be put off applying for a social tariff by making it hard to prove they’re eligible.
People rely on their broadband for staying in touch, working and learning from home. But for those who are really struggling with rising bills, every penny counts.
Special discounts can make all the difference, and too many broadband firms are failing either to promote their social tariff or to offer one at all. We expect companies to step up support for those on low incomes, and we’ll be watching their response.Lindsey Fussell, Ofcom's Network and Communications Group Director
Notes to editors
- Social tariffs offered by communications providers
Product Price Speed Eligibility BT Home Essentials £15 a month Around 36 Mbit/s Various benefits (in and out of work) BT Home Essentials 2 £20 a month Around 67 Mbit/s Various benefits (in and out of work) Community Fibre £10 a month 10 Mbit/s Various benefits (in and out of work) G.Network Essential Fibre Broadband £15 a month 50 Mbit/s Various benefits (in and out of work) Hyperoptic Fair Fibre 50 £15 a month 50 Mbit/s Various benefits (in and out of work) KCOM Full Fibre Flex £19.99 a month 30 Mbit/s Various benefits (in and out of work) Virgin Media Essential Broadband £15 a month 15 Mbit/s Universal Credit