Four million households paying too much for broadband

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Ofcom revealed this week that four million households pay far too much for their broadband. The news comes after a review of pricing across loyal broadband customers.

Across the UK, some 94% of UK households can get fibre – whilst less than half of UK households have signed up. Ofcom found that four million households with slower, basic broadband are now outside their initial contract period

It also found that these customers are continuing to pay that same rate to their broadband provider, without knowing that they can switch to a cheaper rate with faster broadband speeds.

Ofcom has announced plans to try to remove the ‘loyalty’ penalty.  This affects customers that either simply auto-renew or who do not receive communication that their initial contract has ended.

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The regulator also plans to force companies to alert customers about the best deal they can achieve, after their initial contract comes to an end. Companies should also inform longstanding customers each year about the best deal they can get.

This Is Money research highlighted that customers pay up to £273 too much for broadband each year. According to the research, BT has the greatest loyalty penalty.

The research also highlighted that AA customers paid a breakdown cover loyalty penalty of £133. RAC customers paid £110 more on average than the best price for new joiners.

Citizens Advice said that longstanding customers are widely overcharged and that it believed British consumers were being overcharged by a total of £4.1billion a year.

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