Broadband contracts explained

Signing up for a new broadband package means agreeing to a contract. Before committing to a deal, it’s important you know what you’re agreeing to. In this helpful guide, we answer some of your most common questions about broadband contracts.

Signing up for a new broadband package means agreeing to a contract. Before committing to a deal, it’s important you know what you’re agreeing to. In this helpful guide, we answer some of your most common questions about broadband contracts.

Holly Niblett
From the Digital team
minute read
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Posted 4 NOVEMBER 2021

What is a broadband contract? 

A broadband contract is an agreement between you and your broadband provider that allows you to use the internet. 

By signing up to a deal, you agree to pay a monthly bill and other related costs, like set-up fees, in return for a broadband service that lets you shop online, stream TV shows and browse social media, etc. 

Under rules set out by communications regulator Ofcom, contracts must be fair and transparent, so there should be no hidden charges tucked away in the small print.

After you take out a broadband contract, you’ll have a 14-day ‘cooling off period’. During this time, you won’t incur any penalties if you change your mind and decide you want to cancel.

What does a broadband contract usually cover? 

A broadband contract outlines what you can expect from your provider and the terms of service you’ll receive, along with your rights as a customer. 

Your internet service provider must set out things like: 

  • type of broadband plan – standard ADSL or superfast fibre
  • pricing and charges
  • minimum speed you can expect to receive
  • data allowance
  • contract length
  • what can change, such as monthly cost, and what should remain constant throughout the contract
  • details of the cooling-off period
  • details of the complaint-handling procedure.

How much do broadband contracts cost? 

The cost of broadband can depend on several things, like who your provider is, where you live, average speeds and the length of contract you choose. 

Most providers offer fibre broadband deals with superfast internet speeds from around £20 a month. 

When you buy broadband, you'll also be told if you need to pay any set-up costs upfront. These may include a new router (the box that sends out the WiFi signal) and installation charges, so be sure to factor these into the overall cost of your broadband package.

How long do broadband contracts last? 

Broadband contracts generally run for 12, 18 or 24 months. This is the ‘minimum term’ or length of time you’re tied into the deal for. The longer the contract, the less you’re likely to pay overall because you’re agreeing to a longer commitment with the provider. 

A few providers also offer rolling or short-term broadband contracts. These work on a month-by-month basis and can be cancelled at short notice. Because of the flexible nature of these, they tend to be more expensive than longer contracts and you’re unlikely to get introductory offers, perks or other incentives.

Can you switch broadband providers while in a current contract? 

If you’re locked into an existing contract, you’ll usually have to pay an early exit fee if you want to switch your broadband provider. Expect to pay - in one go - for the number of months you have left on your contract, which can be expensive. 

If you’re out of contract, you’ll be able to switch when you want without paying extra charges. There are other instances where you might be entitled to switch early without paying an exit fee – for example, if your provider has hiked the price of your contract in the past 30 days or your speeds fall below the minimum guaranteed level.

How can you reduce the cost of your broadband contract? 

With millions of UK households paying more than they need to for their internet, these tips can help you lower your bills: 

  • Make sure you’re on a deal that matches your needs. For instance, you probably won’t need speeds of over 30Mbps (megabits per second) if you live in a small household and only use the internet to shop online and check social media.
  • Bundling your broadband, phone and TV together into one single contract, with the same provider, can often work out cheaper than paying for them all separately.
  • Haggling with your provider can be a successful way to get a cheaper internet contract. Spend a bit of time researching deals online for similar packages from competitor services. Then contact your provider to let them know you’ve seen better offers elsewhere and ask whether these can be matched or beaten. Always be polite when haggling.

Why do broadband contracts vary in cost? 

While searching for a good deal on broadband, you might be surprised to see what seem like big variations in price. That’s because there can be big differences in network set-ups, download speeds and bandwidth (the amount of data your connection can handle). For example, an ultrafast fibre broadband package that can reach speeds of over 100Mbps and therefore download content faster will usually be more expensive than a basic package with average speeds of only 10Mbps. 

Also, because broadband is a such a competitive business, providers will often offer cut-price deals to attract new customers, then put up prices once the initial contract comes to an end.

Why do broadband contracts depend on your postcode? 

When you’re shopping around for broadband deals, you’ll usually be asked for your postcode so you can find out what’s available in your area. That’s because some broadband networks don’t yet reach all areas, so not all broadband deals are available to everyone. 

With 96% of the UK now having access to superfast broadband, most households will be able to get this, but ultrafast full fibre broadband is only currently available to around 18% of homes. 

The fastest broadband in your area will usually depend on how much fibre optic cabling is in place. Superfast broadband mainly uses fibre-to-the-cabinet technology (FTTC), which is slower than full fibre-to-the-premises technology (FTTP) that connects directly to homes. 

Find out what you can get with our broadband postcode checker.

What happens when my broadband contract ends? 

A few weeks before your broadband contract is due to end, your provider should contact you to let you know what your options are. Under Ofcom rules, they must tell you when your contract is ending and what you’ll pay after this date, as well as giving you details of their best available deals. 

At this point, you’re free to start shopping around for a better deal. It’s a good idea to see what’s out there because by automatically letting your contract roll over, you could end up paying more. Most broadband providers will put up their prices once a contract ends.

Where can I find the best broadband contract for me? 

Right here at Compare the Market. Just type in your postcode and we’ll show you a list of deals available in your area. 

You can compare broadband deals by speed, length of contract and overall cost, as well as anything else included in a package, like freebies or TV and landline. Once you’ve found a deal that’s right for you, simply click through to the provider to sign up. 

If you only have a few months left on an existing contract, it could still be worth switching, even if you have to pay an early exit fee. If you shop around, you might find a package that offers you more than you currently get for a cheaper price.

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