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UK broadband customers hit with ‘loyalty penalty’ of up to £220, survey shows
Broadband customers who stay with the same provider and do not haggle for a better deals are being hit with “loyalty penalties” of up to £220 a year, a consumer group has warned.
Which? found that in some cases consumers would be better taking up a new superfast broadband contract rather than staying loyal to their provider without haggling as it would work out cheaper over the course of a year.
BT customers are at risk of paying the biggest loyalty premium – £220 – of the eight major providers, the watchdog said.
The average annual broadband bill paid by a loyal BT customer is £540 a year compared to £372 for those customers who haggled – £160 more than the provider’s cheapest fibre deal for a superfast connections, its survey suggests.
But new customers who take up a contract for standard broadband with BT now will pay just under £320 a year until their contract is up, usually at least 18 months.
cost for loyal customers.
Long-time customers were paying £540 on average but those who negotiated a better deal saved an average of £156.
TalkTalk‘s new customers paid about £85 less than loyal customers, while Plusnet customers who haggled were paying £48 less on average than those who did not at £252.
Alex Neill, Which? managing director of home products and services, said: “Broadband customers will be appalled that not only could they be paying through the nose simply for being loyal to their provider but that they could, in some cases, also get a much faster internet connection for a fraction of the price that they are currently paying.
“If you are willing to negotiate and happy with your current service, haggling might get you a good discount, but researching the deals available and switching is the best way to ensure you’re on a good value tariff.”
Which? surveyed 3,131 members about their standalone broadband in October 2018.
British consumers wasting £222m a year on slow and unreliable broadband, study finds
Households that allow contracts to expire paying an average of £53.40 more annually to persist with standard packages when faster alternative available
As many as four million UK broadband customers are paying more than they need to for their internet connection, staying with standard providers after their contracts expire despite 95 per cent of consumers living within range of faster, more reliable fibre networks, research shows.
One in three consumers are currently not on a contract because it has expired and are paying an average of £53.40 more annually to persist with standard packages when a fibre connection could ultimately prove cheaper and deliver faster speeds, according to the research carried out by price comparison site uSwitch.com.
In total, £222m is being needlessly squandered on expired standard broadband contracts every year, uSwitch says.
While fibre contracts are on average £6.25 per month more expensive than standard packages, the sudden up-tick in charging when contracts expire is far more severe with the latter option.
Standard subscribers can face a price jump of as much 51 per cent after expiration, comparing unfavourably with the 31 per cent increase typically seen by those with fibre deals, according to the website.
In the worst case scenario identified by uSwitch, subscribers to Sky’s standard Unlimited Broadband saw a 98 per cent jump in charging when their original agreement ends - although the hike is inflated in this case as it relates to customers who had taken up a special introductory offer in the first instance.
Ofcom is currently considering whether to order BT to reduce the wholesale price the telecoms giant charges providers for access to its superfast Openreach network by £20 a year.
If the ruling is given the go-head, fibre customers should see the saving reflected in their bills, a further incentive for those considering switching their allegiances to do so.