More than half of low-income households are in the dark about bargain broadband deals that could save them around £200 a year, with just 5% of eligible households havings signed up to a discounted package so far.
These special offers, known as social tariffs, are available to an estimated 4.3 million households that receive one of a range of government benefits. The packages offer superfast speeds and a price freeze for the duration of the contract, for as little as £12 a month.
However, despite take-up of social tariffs quadrupling since January 2022, Ofcom’s research shows that just 220,000 (5.1%) are now signed up to these deals, which could slice the annual cost of broadband in half.
During this period, the number of providers offering a broadband social tariff increased significantly, and around 85% of customers are now able to switch to one with their existing provider without paying a fee. In addition, three mobile providers also now offer a social tariff.
While Ofcom welcomes the expansion in the number of broadband social tariffs, the low take-up figures demonstrate that more needs to be done to ensure those most in need are aware of the support available.
Of eligible customers that are aware of social tariffs, most had heard about them through social media (26%) and television (21%). But just 9% found out about social tariffs through their provider, highlighting how the industry needs to go further to promote their social tariffs effectively and make them easier to find.
In Ofcom’s review of provider websites, it found that information about social tariffs remains challenging to locate in some cases.
In addition, Ofcom continues to urge TalkTalk and O2 to introduce social tariffs in the broadband and mobile markets respectively and expects them to waive fees for any customers who want to switch providers to access one in the meantime.
Hundreds of thousands of customers are now benefitting from the huge savings that can be made from securing a social tariff. But millions are still missing out on superfast speeds for super low prices – with many not aware they even exist.
We’re urging anyone who thinks they could be eligible for a discount deal to contact their provider today and potentially save hundreds of pounds. Providers should also do much more to help these customers find and access these deals, at a time when these savings could make a massive difference.
Lindsey Fussell, Ofcom’s Group Director, Network and Communications
Cost-of-living pressures persist
As of January 2023, three in ten households (29%) reported an affordability issue when paying for their phone, broadband, pay-TV or streaming bills, equating to approximately 8.1 million households. This is similar level to the record high figure of 32% recorded in October 2022.
Affordability problems can include having to reduce spend elsewhere to pay for a service, making a change to a deal, or missing a bill.
Ofcom’s research also shows 6% of households with broadband and 8% with a mobile found it difficult to afford their service. This rose to 11% and 17% respectively for households on government benefits.
Ofcom analysis found that households with younger individuals, as well as those in part-time work or not in work, were more likely to experience affordability problems with their broadband and mobile services.
On average, an eligible household could save £202 per year by switching to a social tariff. This illustrative calculation is obtained as the difference between the average yearly spend on social tariff and the average yearly spend on a comparable commercial tariff.
Ofcom’s Communications Affordability Tracker findings for January 2023 show that 29% of households reported difficulty affording their communications services. This equates to approximately 8.1 million (+/-800,000) households
Which? has published a new guide rounding up the eligibility criteria and steps people need to take to move to a social tariff with each of the major broadband providers.
Comments Alex Tofts, broadband expert at Broadband Genie:
“The rise of social tariffs has been a success story but plenty more needs to be done. The lack of awareness about these discounted packages among many customers who need them the most, remains a large blot on the industry’s copybook.
“While the regulator cannot force the introduction of social tariffs, it can and should do more to pressure companies to promote them properly. Providers have had enough time to get used to these rates and should be making them easy to find. Sadly on some websites, these deals are hidden away like Easter eggs while more expensive — and higher margin — packages take centre stage.
“As the UK’s fourth-largest provider, TalkTalk also needs to offer a social tariff, alongside their voucher scheme for jobseekers, to make sure they are giving a proper safety net for vulnerable customers.
“Households who are not eligible for a social tariff but struggling with their broadband costs should contact their provider as soon as possible. If they are out of contract they will also be able to save money by switching to another supplier.”