Last Updated: 22nd January 2025, 20:16
The independent regulator of the UK’s communications industries, Ofcom, has shaken up the way UK phone, broadband, and pay TV companies will handle contracts moving forward as of the 17th of January 2025. In recent years, many companies changed their contracts so that the prices their customers paid would increase over time in relation to inflation rates, but this will no longer be allowed as per Ofcom’s new consumer protection rules.
First announced last year, on the 19th of July, no longer will telecoms customers be unfairly affected by contracts. Instead, the new rules mean that contracts must state in pounds and pence how much the prices will change and when they will occur. This must be displayed prominently and be transparent to the customer.
What Does This Mean For You?
If you are ready to get a new phone or upgrade your contract, how will their new rule impact your finances?
There will no longer be uncertainty or lack of clarity with regard to how much your contracts will go up every year. As inflation hardly goes down and no one can predict the direction it will go in, the realities of signing a contract that would increase prices according to inflation rates would mean that the customer would rarely benefit and only have to keep digging deeper into their pockets. A lot of these customers who signed contracts agreeing to percentage-based price increases according to inflation didn’t necessarily understand what they were signing up for. This left many feeling a financial burden and plenty of difficult decisions as their contracts kept rising.
Therefore, with this new change, you have a much clearer understanding of the exact price and when you will pay it and take back that control of your finances.
Take the following example:
If you sign a £30 a month phone contract, your provider must state that it will increase to £31.50 in March 2025. If your phone contract lasts longer than this, they will also state that the price as of March 2026 will be £33.
Regardless of how much your phone contract is, when agreeing to something as of now, it should explicitly detail it in terms of pounds and pence.
Competitive Contacts You Can Benefit From
With more knowledge and clarity over pricing, you can compare deals more easily, finding the contract that works for you and doesn’t leave you with financial burdens. As Ofcom stated, they are “stepping in on behalf of phone, broadband, and pay TV customers to stamp out this practice” to allow customers to “take advantage of the competitive market we have in the UK.”
Their research suggested that more than half of customers for broadband and pay monthly mobile customers did not fully understand the impact of inflation, including terms like CPI and RPI measure, and knowing that many across the country were and are still feeling the financial squeeze, Ofcom felt the change was absolutely necessary.
What You Need To Look Out For
Some providers did start making the change last year, but now all are under this new regulation. The reason it is only just kicking in now was to allow all providers time to make any changes required. When signing a contract as of now, ensure it states in pounds and pence, not percentages, what your new prices will be as of the next financial year.
Take your time looking around for the best deals with us, safe in the knowledge that you will be able to see how each financial year will leave you.
