Millions of mobile phone and internet users could be paying 17.3% more on their bills this time next week

Published

2 years ago

March 24, 2023

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Millions of mobile phone and internet users are facing a price increase of 17.3% on their bills in just a week’s time.

Every April, many broadband and mobile firms raise their prices in line with the Consumer Price Index (CPI) plus an additional 3-3.9%.

As these price rises are often applied mid-contract, people either have to accept these new prices or pay costly exit fees to leave their contract early.

But with some 11 million people out of contract, if they switch before the rise next week they would be exempt from the increase.

It comes as industry regulator Ofcom launched a review to determine if consumers have enough clarity on mid-contract cost increases.

Uswitch has also been campaigning to allow all consumers to leave contracts penalty-free in the face of price rises as most providers don’t allow this. The price comparison site believes providers who impose inflationary increases should allow customers to leave their contract early without penalty, or offer contracts where the price remains fixed for the duration.

Ernest Doku, telecoms expert at Uswitch, said: “There is still time to avoid the impact of April’s price rises. Broadband and mobile customers should check now to see if they can switch to avoid paying more than they need to.

“Millions of consumers are currently out of contract, and therefore can still shield themselves from the brunt of these inflation-busting increases.

“Not only could you switch to a faster and more reliable product, but also pay less per month – although future price rises may still apply from 2024 in many cases.”

How to beat the broadband hikes from the experts at USwitch

1. If you are out of contract or coming to the end of your contract: Some providers will allow you to switch to a new deal this month to avoid mid-contract increases until 2024

2. If you are mid-contract: Check if you are eligible to switch and if there are any charges associated with switching. Even if there is a charge to switch, this may still offer you a saving in the longer term

3. If you can’t switch, sign up: Companies like Uswitch provide up-to-date consumer information on the mobile and broadband market. Sign up for the latest deals so you’re fully clued up on the market when you can switch in future

4. Check if you’re eligible for social tariffs: If you receive state benefits you may be eligible to sign up for social tariffs, designed to ensure everyone has access to modern-day utilities such as broadband. Major providers such as EE, Virgin and Vodafone offer connectivity from £12.00 with no set-up fees – and no mid-contract price increases

Who has the highest early exit fee?

Some internet companies have confirmed they will be doing more to help vulnerable and low-income households. For example, Vodaphone is automatically exempting customers that it has identified as financially vulnerable from this year’s price rises.

TalkTalk has said it will automatically exempt its most financially vulnerable customers – but did not explain its criteria for assessing this or how it would be publicised.

Providers know that for financially vulnerable customers, mid-contract price rises are potentially devastating – which is why their social tariffs offer fixed prices that are exempt from annual rises.

Based on the average amounts paid by low-income customers in Which?’s latest broadband survey, the consumer champion calculated how much a low-income BT, EE, Plusnet, TalkTalk or Vodafone customer (those earning £21,000 or less a year) could see their payments increase.

It found this group could see payments go up £77 per year. On average, they face a rise of £52 annually and look set to pay £431 a year for their broadband – at least 2% of their annual income.

BT customers had the highest monthly prices of any of the companies Which? looked at and could see an annual increase of almost £60 from next week. Low-income BT customers could also face the highest exit fees, costing £194.34 if they want to leave a year early.

Switching to a social tariff

Which? research shows that the average low-income customer affected by the price rise could save as much as £220.32 – £18.36 per month – by switching to a social tariff.

These are cheaper broadband and phone packages for people claiming Universal Credit, Pension Credit, and some other benefits.

They are delivered in the same way, just at a lower price. Some providers may call them “essential” or “basic” broadband.

BT customers would make the biggest annual saving of £260.16 (£21.68 a month) by switching to a social tariff. Vodafone customers would make the lowest savings of £168 a year (£14 a month).

Rocio Concha, Which? Director of Policy and Advocacy, said: “Telecoms providers must urgently cancel the 2023 price hikes for financially vulnerable customers. They should work to proactively identify these customers and ensure they’re not financially penalised, even if they don’t take up a social tariff.”

Business

Tesla approves $29bn share award to Elon Musk

Published

18 hours ago

August 4, 2025

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Tesla approves bn share award to Elon Musk

Tesla’s board has signed off a $29bn (£21.8bn) share award to Elon Musk after a court blocked an earlier package worth almost double that sum.

The new award, which amounts to 96 million new shares, is not just about keeping the electric vehicle (EV) firm’s founder in the driving seat as chief executive.

The new stock will also bolster his voting power from a current level of 13%.

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He and other shareholders have long argued that boosting his interest in the company is key to maintaining his focus after a foray into the trappings of political power at Donald Trump‘s side – a relationship that has now turned sour.

Musk is angry at the president’s tax cut and spending plans, known as the big beautiful bill. Tesla has also suffered a sales backlash as a result of Musk’s past association with Mr Trump and role in cutting federal government spending.

The company is currently focused on the roll out of a new cheaper model in a bid to boost flagging sales and challenge steep competition, particularly from China.

The headwinds have been made stronger as the Trump administration has cut support for EVs, with Musk admitting last month that it could lead to a “few rough quarters” for the company.

Tesla is currently running trials of its self-driving software and revenues are not set to reflect the anticipated rollout until late next year.

Musk had been in line for a share award worth over $50bn back in 2018 – the biggest compensation package ever seen globally.

But the board’s decision was voided by a judge in Delaware following a protracted legal fight. There is still a continuing appeal process.

Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details.

The special committee said in the filing on Monday: “While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging… we are confident that this award will incentivize Elon to remain at Tesla”.

It added that if the Delaware courts fully reinstate the 2018 “performance award”, the new interim grant would either be forfeited or offset to ensure no “double dip”.

The new compensation package is subject to shareholder approval.

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Motor finance operators can breathe big sigh of relief

Published

18 hours ago

August 4, 2025

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Motor finance operators can breathe big sigh of relief

Bank stocks have enjoyed a boost as traders digest the Supreme Court’s ruling on the car finance scandal.

Some of the country’s most exposed lenders, including Lloyds and Close Brothers, saw their share prices jump by 7.55% and 21.62% respectively.

It came after the court delivered a reprieve from a possible £44bn compensation bill.

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Banks will still most likely have to fork out over discretionary commissions – a type of commission for dealers that was linked to how high an interest rate they could get from customers.

The FCA, which banned the practice in 2021, is currently consulting on a redress scheme but the final bill is unlikely to exceed £18bn. Overall, the result has been better than expected for the banks.

Lloyds, which owns the country’s largest car finance provider Black Horse, had set aside £1.2bn to cover compensation payouts.

Following the judgment, the bank said it “currently believes that if there is any change to the provision, it is unlikely to be material in the context of the group”.

The judgment released some of the anxiety that has been weighing over the Bank’s share price.

Jonathan Pierce, banking analyst at Jefferies, said the FCA’s prediction was “consistent with our estimates, and most importantly, we think it largely de-risks Lloyds’ shares from the ‘motor issue'”.

Bank stocks have responded robustly to each twist and turn in this tale, sinking after the Court of Appeal turned against them and jumping (as much as 8% in the case of Close Brothers) when the Supreme Court allowed the appeal hearing.

Concerns about this volatility motivated the Supreme Court to deliver its judgment late in the afternoon so that traders would have time to absorb the news.

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FCA considering compensation scheme over car finance scandal – raising hopes of payouts for motorists

Published

2 days ago

August 3, 2025

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FCA considering compensation scheme over car finance scandal - raising hopes of payouts for motorists

Thousands of motorists who bought cars on finance before 2021 could be set for payouts as the Financial Conduct Authority (FCA) has said it will consult on a compensation scheme.

In a statement released on Sunday, the FCA said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.

“Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way,” the statement continued.

The FCA said it estimates the cost of any scheme, including compensation and administrative costs, to be no lower than £9bn – adding that a total cost of £13.5bn is “more plausible”.

It is unclear how many people could be eligible for a pay-out. The authority estimates most individuals will probably receive less than £950 in compensation.

The consultation will be published by early October and any scheme will be finalised in time for people to start receiving compensation next year.

What motorists should do next

The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.

Anyone who has already complained does not need to do anything.

The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now.”

Its website advises drivers to complain to their finance provider first.

If you’re unhappy with the response, you can then contact the Financial Ombudsman.

The FCA has said any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.

It has warned motorists that doing so could end up costing you 30% of any compensation in fees.

The announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.

The court overturned a ruling that would have meant millions of motorists could have been due compensation over “secret” commission payments made to car dealers as part of finance arrangements.

The FCA’s case concerns discretionary commission arrangements (DCAs) – a practice banned in 2021.

Under these arrangements, brokers and dealers increased the amount of interest they earned without telling buyers and received more commission for it. This is said to have then incentivised sellers to maximise interest rates.

In light of the Supreme Court’s judgment, any compensation scheme could also cover non-discretionary commission arrangements, the FCA has said. These arrangements are ones where the buyer’s interest rate did not impact the dealer’s commission.

This is because part of the court’s ruling “makes clear that non-disclosure of other facts relating to the commission can make the relationship [between a salesperson and buyer] unfair,” it said.

It was previously estimated that about 40% of car finance deals included DCAs while 99% involved a commission payment to a broker.

Nikhil Rathi, chief executive of the FCA, said: “It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated.

“We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.”