Mid-contract price rises: How they work

Broadband and mobile providers have increasingly taken to raising their prices each year for customers stuck within a minimum term contract.

Previously based on a measure of inflation, Ofcom has now banned inflation-linked mid-contract price rises, but not the price rises themselves.

Many providers continue to increase prices on an annual basis, just now by a pounds and pence-based amount instead.

---

How much are prices increasing by?

While Ofcom has now moved to ban inflation-linked price rises, this won't come into effect as a rule until 17th January 2025.

Despite this, providers have already begun updating their pricing policies and contracts, with BT, Plusnet, EE, Vodafone, and TalkTalk, all announcing their move to a pounds and pence-based annual price rise of £3 per month for broadband.

However, until January 2025, providers can continue to use inflation-based methods, including Consumer Price Index (CPI) + 3.9%, which is the most common method.

It's also the case that contracts already taken out are likely to have older inflation-linked annual price rises in the terms, and these will still apply in 2025 and beyond, as the new rules only apply to new contracts.

So far, contracts taken out, or re-contracted, from today, will be subject to the following annual price rises on broadband from each provider (amounts for TV and mobile services differ, which we look at below):

In terms of the old inflation-based method, providers sometimes use the Consumer Price Index (CPI) value from different months, which causes variations in how much prices increase by. In addition, when the price rise comes into effect is also sometimes implemented at different times, although it's most often around April.

---

Can I leave my contract if prices are raised?

Usually the unfortunate answer to whether you can leave your broadband contract early if prices are increased is no, or at least not without paying early leaving fees.

This is because Ofcom currently allow providers to increase prices of both in-contract and out of contract customers as long as the price increase is clearly specified at the point of sale and in the terms and conditions.

Even in Ofcom's new rules, due to come into effect from January 2025, providers are still allowed to increase prices annually. The only thing that has been ruled against is continuing to use either inflation-linked or percentage-based price rises.

This is true therefore of all the providers listed in the table above where they specify that prices will increase by an actual amount, including BT, EE, Plusnet, TalkTalk, Vodafone, and Virgin Media.

The exception to this is Sky and their subsidiary NOW Broadband, who use "prices may change" terms and then inform customers of how much their prices will go up by giving notice in advance of the change. Part of this notice has so far always included the option for customers to reject the increase and cancel their contracts without penalty.

In addition, customers who took out Virgin Media contracts prior to April 2023 will see the following in their terms and conditions:

We may increase our charges under this agreement at any time. We may also change these terms and conditions, the equipment, and the services that we have agreed to provide to you.

Subject to the exceptions explained below, if we do any of these things and the changes are not exclusively to your benefit, we will notify you of this and inform you of your right to cancel this agreement without paying an early disconnection fee by giving us notice in accordance with Section N.

Section N relates to ending the contract by giving Virgin Media 30 days' notice.

However, as a result of merging with O2 in June 2021, Virgin Media stated they would be adopting O2's pricing terms and implemented contractual price rises of Retail Price Index (RPI) + 3.9% from April 2023.

---

Further details: Price rises by provider

Some customers may be free from price rises depending on when they took their current contract out.

Here's the details of each broadband provider's annual price rises.

BT, Plusnet, and EE

BT was the first provider to announce their pricing policy would be updated to a pounds and pence based method, with a £3 increase on broadband and a £2 rise for TV plans effective on contracts taken out from 10th April 2024.

EE mobile contracts will also be increasing by £1.50 per month for new and recontracting customers, while Plusnet broadband contracts taken out after 11th July 2024 will see annual price rises of £3 per month in March of each year.

Existing customers with older contracts will still be subject to the old CPI + 3.9% annual price rises for BT, EE, and Plusnet, which saw prices rise by 7.9% in April 2024.

Customers with these providers who are still within their minimum terms won't be able to cancel their contracts early without penalty as the providers all include the £3 per month or CPI + 3.9% increase in their terms.

Vodafone

Vodafone's fixed line broadband contracts taken out or renewed from 2nd July 2024 now include an annual price rise of £3 per month, and customers won't be able to exit their contracts early if prices go up.

Previously, Vodafone used the January figure of CPI and increased prices by CPI + 3.9% in April of each year. As with BT, their prices went up by 7.9% in April 2024.

Customers who took out a contract before 2nd February 2021 will be subject to RPI + 3.9% increases instead. These rises may be slightly higher, as the Retail Price Index is often more than the Consumer Price Index.

TalkTalk

From 12th August 2024 all new TalkTalk broadband contracts will be subject to an annual price rise of £3 per month.

Prior to this, TalkTalk increased prices by CPI + 3.7% and used the January figure of inflation, which saw prices rise by 7.7& in Spring 2024.

As with the providers above, as these price rises are specified amounts in the contract customers are unable to exit their contracts early without penalty when prices go up.

Sky and NOW Broadband

Sky and subsidiary NOW Broadband state that "prices may increase" during a minimum term. Since Ofcom's announcement of rule changes, their stance hasn't changed either, so we can expect it likely to continue into 2025.

In 2024, Sky increased prices by an average of 6.7%, with broadband plans increasing from between £1 and £4 per month. The year before, Sky TV and broadband prices went up by 8.1%.

Similarly, NOW Broadband prices went up by £3 per month in 2024, and by £3.50 per month in 2023.

Both providers gave customers 31 days from receipt of the notifications to cancel their contracts and leave penalty free if they didn't want to accept the price rises.

Virgin Media

Virgin Media last updated their annual price rise policy in April 2023, when they implemented contract-specified rises of Retail Price Index (RPI) + 3.9% in a move to streamline with partner O2.

So, contracts taken out after April 2023 will be subject to annual price rises of RPI + 3.9%, which was 8.8% in 2024, and customers can't leave their contract early.

While Virgin Media have yet to announce a change to a pounds and pence-based method, it's likely this will come sometime before January. Until then though, new contracts taken out will continue to be subject to the existing RPI + 3.9% terms.

Contracts taken out before April 2023 however, are subject to different terms, with Virgin Media previously saying customers could exit their contract penalty free if prices ever go up.

Community Fibre

Community Fibre switched to annual price rises in late 2021 and now reserve the right to increase prices by CPI + 2.9% in their contracts.

Community Fibre use the January figure of CPI, and increase prices in April of each year. We saw prices rise by 6.9% in April 2024.

Customers who take out a Community Fibre broadband contract between now and 4th November 2024 will receive fixed prices on their contract for their entire minimum term period. However, the provider is yet to announce any changes to their underlying inflation-based terms.

Gigaclear

Customers who signed up to Gigaclear before 1st March 2022 aren't subject to mid-contract price rises as their contracts were taken out when the provider was offering fixed prices.

However, anyone who's signed up to Gigaclear since 1st March 2022 will be subject to annual price rises of CPI + 3.5%.

Gigaclear are slightly different from most other providers in that they increase prices in October, rather than April. They also use the July rate of CPI which has yet to be announced for 2024, so we can't say specifically how much Gigaclear prices will rise by yet.

Shell Energy Broadband

While Shell Energy Broadband has now been sold to TalkTalk, existing contracts will be based on a CPI + 3% calculation to increase prices. This means customers of Shell Energy won't be able to leave their contract early without penalty because the increase is baked into their contracts.

Shell Energy Broadband prices increased by 7% in April 2024 as the provider uses the January figure of CPI.

---

Regulation of mid-contract price rises

In July 2024, Ofcom finally decided to ban inflation-linked mid-contract price rises, with providers told to use more transparent pounds and pence-based rises instead.

The announcement followed a consultation on the ban after Ofcom started investigating the fairness of mid-contract price rises in February 2023 when a period of high inflation saw annual price rises go as high as 17.3%.

The regulator basically decided that the use of inflation as a price rise method wasn't clear enough for consumers to fully understand the cost implications when they took out a contract. They also banned the use of percentage-based increases for similar reasons, instead suggesting providers should give customers an exact amount in pounds and pence.

While the pounds and pence-based method is certainly clearer and easier to understand, it too has its downsides however.

For example, we're seeing most providers move to annual price rises of £3 per month on broadband, but this penalises those on cheaper tariffs more than those already paying larger bills.

This is something that's already been picked up by Three, with their implementation of a tiered system based on how much data allowance a mobile plan has.

It's also the case that customers paying £3 per month increases will actually be paying more than they would have done on the older CPI + 3.9% method, as inflation has now fallen to 2.2%.

A £3 per month increase on an average broadband bill of £35 would amount to an increase of 8.5%, or a comparable inflationary-based figure of 4.6% (+3.9%), while a CPI + 3.9% would currently be just 6.1%.

It's note-worthy then that these changes made by Ofcom were prompted by high annual price rises, with the Culture Secretary at the time, Michelle Donelan, saying, ""At a time when families are struggling to pay their bills, imposing above-inflation price hikes is not the right thing to do."

Yet, while definitely clearer, annual price rises don't look to be getter any cheaper, as providers have now locked-in "above inflation" price rises under Ofcom's new rules.

---

Fixed broadband prices

While the majority of broadband and mobile providers now have contractual annual price rises, there are still a small selection who offer fixed prices.

Fixed prices mean the provider contractually promises not to increase prices during a customer's minimum term. If they do so, the customer would be allowed to leave their contract early without penalty.

Providers offering fixed broadband prices currently include Hyperoptic, Fibrus, Rebel, iTalk, and Community Fibre with their current offer until 4th November 2024.

Smaller, alt-net, providers also tend to be more likely to offer fixed prices, with Hey! Broadband, Lit, Airband, BeFibre, Quickline, Trooli, and LightSpeed, all promising no mid-contract price hikes.

Zen Internet also promise fixed prices, but it's worth remembering they tend to have higher prices to start with, so customers may not necessary save more by opting for a fixed price broadband provider.

Read more on fixed prices and who offers them in this guide.

---

Summary: moving in the right direction

Mid-contract price rises have become the norm in both the broadband and mobile sectors over the past few years, with very few providers left offering fixed prices.

While a period of high-inflation has now seen the end of inflation-linked mid-contract price rises, consumers aren't totally protected from them yet, with many providers simply moving over to a pounds and pence-based method, that could be more expensive, instead.

It's true however, that with clearer pricing customers are better able to decide affordability, but sometimes finances change, and bills still going up is not helpful when we're also stuck in a minimum term contract.

So, while mid-contract price rises are moving in the right direction, there's still a big question mark over whether Ofcom are doing enough to protect customers fully from these annual price hikes during contracted periods, and whether they're really necessary at all.

Read more in our campaign to improve the regulation of mid-contract price rises.