Millions of Brits are at risk of being unable to afford their monthly phone bills – as mid-contract price hikes gouge away at their struggling finances.

A poll of 2,000 adults found almost one in 10 – around five million people – have been unable to pay essential bills since the start of the Covid-19 pandemic.

And 38 per cent warned even a small increase to household or utility bills would lead to financial worries, with 14 per cent fearing it would leave them unable to pay a bill at all.

It also emerged 44 per cent have become more worried about their financial situation since the start of the pandemic.

The findings come as some mobile providers have announced price hikes of up to 4.5 per cent for some SIM-only and pay monthly customers from April.

These price rises, based on RPI and CPI inflation, are some of the highest on record and have been blamed on rising investment costs to support growing demands on the network.

But half of the adults polled weren’t aware a network provider could put up their prices mid-contract – despite the industry making more than a billion pounds of revenue from the practice since 2013.

Tom Denyard, CEO of Tesco Mobile, which commissioned the research and guarantees no mid-contract price rises, is calling on other networks to reverse price hikes this year and promise to keep prices frozen throughout the duration of their customers’ contracts.

He said: “Beyond being misleading, our research has shown that mid-contract price rises in our industry will have a financial impact on those who have already been hit hard.

“There could not be a worse time for networks to implement their biggest price rises.

“For a family of mobile users, the increased costs mean less items in the weekly shopping basket or additional pressure to pay a bill that was higher than expected.

“During one of the most uncertain financial times on record, and at a time of physical isolation, this is not a time to be making a phone harder for someone to afford – that’s why we are calling on other networks to reverse price rises this year.”

The study also found this ‘Digital Divide’ can be partly explained by the lack of understanding around industry jargon.

Nearly half (48 per cent) don’t understand the term RPI (Retail Price Index), while more than two-thirds are unaware of what CPI (Consumer Price Index) means – although both are often used in small print and force customers to accept price rises whatever
their situation.

But almost four in 10 never read the small print of their contracts.

And 86 per cent feel providers who do hike their prices should be banned from doing so.

Karen Perrier, CEO of national debt charity and helpline, Money Advice Plus, said: “Household debt is increasing daily – calls to our helpline have increased over the past few months, with an alarming amount of people struggling to afford essentials like food, heating, or even their phone bills.

“That’s why it feels especially wrong to profit from price hikes this year – a few pounds out of a household budget can have a devastating effect.

“We’ve seen how essential phones and broadband have been for people during the pandemic – they’ve kept people connected during lockdown but have also been integral to the likes of home-schooling, collecting benefits and accessing support.

“It’s vital that we ensure that people can afford to stay connected and we would really encourage the networks to think again about the impact of their actions and the transparency of their contracts.

“As an organisation, we’ve existed for 150 years and we’ve never known a worse situation – with the potential of more hardship to come.

“That means everyone needs to play their part to take the pressure off the most vulnerable.”


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