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Millions of low income households are overpaying for their broadband, says Ofcom

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Ofcom
Social tariffs — which ensure affordable rates for people receiving benefit payments in the UK — could save eligible homes around £200 in broadband costs per year, Ofcom said.

More than half of low-income homes who qualify for cheaper broadband tariffs are missing out on the deals, according to the UK communications regulator. 

Only 220,000 households were on a social tariffs as of February 2023, meanwhile 53 per cent of people receiving benefit payments were completely unaware of cheaper deals, Ofcom revealed in a report on Monday.

Social tariffs — which ensure affordable rates for people receiving benefit payments in the UK — could save eligible homes around £200 per year, Ofcom said.

The regulator called on providers to better publicise cheaper rates, which could ease the burden of broadband costs in what has been dubbed ‘awful April’ with many low income households struggling under the pressure of rising food and fuel bills. 

Only 5.1 per cent of the 4.3 million homes receiving universal credit payments were signed up to social tariffs, Ofcom said.

Last month the consumer group Which? urged broadband firms to cancel “exorbitant” mid-contract price rises for vulnerable customers less than two weeks before an April price hike was due to take effect.

Struggling to afford rising broadband costs

A number of broadband providers — including Vodafone, BT, Virgin Media, and EE offer social tariffs. Both availability and awareness of affordable rates have increased in the last year, according to Ofcom, but the majority of benefit-claimants still remain in the dark.

Affordable rates range from £10 – £20 per month, according to Ofcom, which said that it cannot introduce regulated social tariffs without government action and can only encourage providers to introduce cheaper deals.

The regulator has called on providers O2 and TalkTalk to introduce social tariffs.

Ofcom also said that three in ten households were now struggling to afford communications services as the cost-of-living crisis exacerbated strain on homes.

In January, 13 per cent of homes cut spending on food and clothes to afford these services while 11 per cent cancelled communication service in its entirety, according to the report.