PRICE RISES LOOM FOR MORE THAN 10 MILLION HOUSEHOLDS AS BROADBAND CONTRACTS COME TO AN END
- Two fifths (41%) of households have switched broadband provider since the start of the pandemic and now could face significant price rises when their contracts come to an end
- 59% of households have not switched broadband provider in more than two years, and as many as 15% have never switched
- Double the amount of households see reliability rather than price as the most essential part of their broadband service. However, annual price rises are likely to be almost twice as much as households expect
- You may be able to improve your broadband speed by switching provider. Use comparethemarket.com’s broadband speed test to compare your connection against different providers in your area
13 January 2022: Nearly 11 million households who changed broadband providers during the pandemic could face being switched onto a more expensive “default” service when their initial contract period comes to an end, according to research by comparethemarket.com.
A survey of more than 2,000 broadband customers found that 41% of households switched broadband provider in the last two years, with 29% doing so due to working from home in the pandemic. Most broadband deals are available as 12, 18, or 24-month packages. As a result, millions of households face the potential of being switched onto a more expensive default contract by their current provider.
Households coming to the end of their contract period could be in for a price shock. When asked how much their broadband costs would go up by at the end of their initial contract, the average respondent said it would rise by an average of £31 per year. However, according to Ofcom, the average price rise for out-of-contract households is nearly double that amount. On average, out-of-contract households pay around £4.70 per month more than the provider’s average price for their broadband package, or an extra £56 per year. In the event of a price rise of £25 a month, research from comparethemarket.com shows that there is a rise in switching intention for a number of consumers.
Some 58% of respondents said that when their contract ends they will consider switching provider. The research shows, however, that the broadband market does suffer from switching inertia which could leave many households on more expensive contracts: 59% of households have not switched in more than two years. Of those, 15% said they have never switched. Respondents aged 55+ were most likely to have never switched their broadband provider.
The main reason people switched provider during lockdown was due to issues with broadband speed (39%). For most people choosing a broadband deal, the reliability of broadband is more important than paying a low price, according to research by comparethemarket.com. 66% of respondents described the reliability of broadband as essential, compared to 31% who described a low price as essential.
Mubina Pirmohamed, head of digital at comparethemarket.com, said:
“In the last two years we have seen a surge in households changing broadband provider. Working from home tested people’s broadband reliability, with many deciding to switch in a bid to find a better provider. Those who switched are now nearing the end of their initial contract periods and may face significant price-hikes if they choose to stick with their current provider. Shopping around online and switching to a better deal can help people to improve broadband speed and save money. At a time when bills are going up across the board – from energy to supermarket trips – it is important to see if you can get better value for money by switching broadband provider.”
Notes to Editors
Study based on 2,022 Internet Bill Decision Makers, conducted by Censuswide (01-5 December)
There are 27.8 million households in the UK according to the ONS, 96% (26.7 million) of all household have an internet connection. 41% of households switched within the past two years which is equivalent to 10.9 million households.
Additional research based on 1,530 UK adults, conducted by YourSay (08-13 December)
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comparethemarket.com is a trading name of Compare The Market Limited. Registered in England No. 10636682. Registered Office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS. Compare The Market Limited is authorised and regulated by the Financial Conduct Authority for insurance distribution (Firm Reference Number: 778488). Energy and Digital products are not regulated by the FCA.