Mid-contract-inflation-(web)

Protecting consumers from uncertain and volatile inflation

Published: 17 January 2025

Telecoms providers must now set out upfront, in pounds and pence, any price rises that will apply to customer contracts, under new Ofcom rules that come into force today.

As we have seen in recent years, inflation can be incredibly volatile, and is difficult to predict. Our rules will protect consumers from bearing that risk, and ensure providers are clear about prices customers are obliged to pay over the whole contract period.

In recent years, many phone, broadband and pay TV companies have included price rises in their contract terms that were linked to unknown future inflation rates. These terms made it complex and laborious for customers to estimate what they will pay under a new contract, and complicated the process of shopping around for a deal. We have now banned this practice.

From today, any price rise written into a customer’s contract will need to be set out in pounds and pence, prominently and transparently, at the point of sale; and providers will need to be clear about when any changes to prices will occur. This will give consumers clarity and certainty about the prices they will have to pay, helping them choose the best deal for their needs.

Graphic showing how our proposed rule changes may change how information is presented on a providers website comparing before the rule changes (price variation terms set out as a footnote using the CPI+3.9% format); to after the proposed rule changes. The after example used states: “Monthly subscription price:  £30.00 until 31 March 2025" and underneath "Increasing to: £31.50 on 1 April 2025" and "£33.00 on 1 April 2026”.

Natalie Black CBE, Ofcom’s Group Director for Networks and Communications, said:

More than ever, households want and need to plan their budgets. Our new rules mean there will be no nasty surprises, and customers will know how much they will be paying and when, through clear labelling.

Different types of contracts are available

Ofcom has put in place protections to make sure that consumers can shop around with confidence and take advantage of the range of different types of packages available.

Several providers offer contracts that do not contain price rises. Some others offer contracts that permit for unspecified price rises during the contract period. If they do this, they must give customers 30 days’ notice and the right to exit penalty-free, so consumers can avoid these price rises if they want.

Competition driving prices down and speeds up

The UK’s competitive telecoms market is delivering more investment and lower prices for people and businesses. Over the last year, average prices for broadband and mobile bundles in the UK have fallen, with the fastest packages seeing the biggest drop.

At the same time, companies have been investing in upgrading their networks, with now accessing faster full-fibre broadband.

Help for people on lower incomes

For people claiming certain benefits, there are cheaper packages available known as social tariffs, which don’t include any mid-contract price rises. These make sure there are affordable options available for low-income households.

An increasing number of people are benefitting from these offers, with more than 500,000 customers haven taken advantage of them.

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