Broadband speed fears slowing take up of social tariffs, Which? warns

Broadband speed worries are putting eligible households off signing up for discounted broadband deals, Which? reveals, as the consumer champion calls on telecoms providers to improve their social tariff offerings and allow eligible customers to switch without fees.

Social tariffs are special discounted deals available for certain low-income customers – typically those in receipt of benefits, such as Universal Credit. However, according to Ofcom, only 136,000 (3.2%) out of the 4.2 million households receiving Universal Credit are on a social tariff.

Which? surveyed more than 2,000 people eligible for fixed broadband social tariffs to uncover the barriers to signing up. Worryingly, four in 10 (39%) of those surveyed who are eligible for and aware of social tariffs do not intend to sign up at all – meaning they could be missing out on much-needed discounts.

The main reasons cited for not switching among those aware of social tariffs were fears that the social tariff speed offered was too slow (44%), not being able to leave a current contract (32%), the deal not being good enough (24%) and lacking information (24%).

Six in 10 (63%) eligible households surveyed said they were completely unaware social tariffs exist – with half (51%) of this group saying they were likely to switch after hearing about social tariffs.

Which? is concerned that some broadband providers only offer slower than average connections for social tariffs, while others still do not offer them at all – potentially trapping customers who could be eligible for discounted deals on expensive contracts.

Which?’s research found three national providers for fixed broadband currently only offer social tariffs with average speeds of 38mbps or less – significantly lower than the median UK download speed of 59 megabits per second – Sky, NOW and Vodafone.

While these connection speeds will work sufficiently for some households, they may not be enough for those with more demands on their broadband – for example, families with multiple people using the internet.

Some providers – including EE, Plusnet, Shell and TalkTalk – still do not offer their own social tariffs.

Customers are generally able to switch to their own provider’s social tariff without paying exit fees on their current contract – although providers are not always upfront about this.

However, people are often asked to pay these fees to move to another firm’s social tariff mid-contract. This means that customers with providers who do not offer social tariffs or only offer lower speed social tariffs could find themselves unfairly penalised for trying to move to a social tariff which better meets their needs.

Three providers – Virgin Media, BT and Hyperoptic – all offer several social tariff offerings at different speeds at various price points.

Virgin Media currently offers a 15mbps social tariff for £12.50 a month. This is significantly slower than its slowest commercial tariff and something Ofcom has previously criticised the firm for. However, it is now due to introduce a faster 50mbps tariff for £20 – allowing those with more demands on their internet to choose a connection suitable for them.

BT offers a 36mbps social tariff for £15 a month and a 67mbps deal for £20 to new and existing customers. Hyperoptic also offers two social tariff options at higher speeds of 50 mbps for £15 or 150mbps for £25 to both new and existing customers.

As part of its cost of living campaign, Which? is calling on all providers to offer a range of social tariffs to suit every households’ needs and ensure they are properly advertising all their social tariff offerings to new and existing customers.

During an unrelenting cost of living crisis, providers should also ensure people do not have to pay Early Termination Charges (ETCs) to move to a social tariff – even if they are moving to another provider.

Rocio Concha, Which? Director of Policy and Advocacy, said: 

“People who are struggling financially and trying to make savings during the cost of living crisis should not be made second-class citizens when it comes to broadband – which is vital for work, education and family life.

“Our research shows that lack of awareness and concerns about slow connections are major factors hampering take-up of social tariffs – so broadband providers need to do more to promote their social tariffs to low income customers and improve their range of options to ensure that these deals fit customers’ needs.

“Providers must also make sure people do not have to pay Early Termination Charges (ETCs) to move to another firm’s social tariff. During a cost of living crisis, people should not be left trapped in a deal which does not work for them due to high exit fees.”

ENDS

Notes to Editors

Which? cost of living campaign

The consumer champion recently launched a campaign calling on businesses in essential sectors – supermarkets, telecoms and energy – to do more to help their customers through the cost of living crisis.

Which? is calling on providers to offer a range of social tariff options to ensure that these tariffs are fit for purpose and meet the customer’s needs. Providers should also clearly advertise if customers are able to switch to their own provider’s social tariff without paying exit fees on their current contract.

Any awareness raising campaigns from the government and providers must address the perceptions of speed and contractual barriers highlighted in the consumer champion’s research.

Read more about the campaign here and more about Which?’s calls on businesses here.

Research 

Yonder, on behalf of Which?, conducted an online survey of 2,009 adults whose households were eligible for a broadband social tariff. Fieldwork took place between 26th August and 8th September 2022. To determine eligibility, Which? surveyed only those in receipt of nine benefits, including Universal Credit Claimants.

Before taking this survey, were you aware of broadband social tariffs?

Is your household currently on a broadband social tariff?

Table of widely available social tariffs: 

This table focuses on large social tariff providers – which cover over 95 per cent of the market.

Some smaller localised providers – Country Connect, G Network, Air Broadband, WightFibre and Grayshott Gigabit – all offer high speed social tariff of 50mbps or more to new and existing customers. Country Connect and GNetwork offer 50 mbps for £15 a month, AirBroadband and Grayshott Gigabit offer 100mbps for £20 a month and WightFibre now offers 100Mbps for £16.50.

KCOM only offers a 30mbps social tariff for £14.99 a month. Only having one lower speed option means that consumers from households with more demands on their broadband cannot choose a connection suitable for them.

Case study

Roberta, a 57-year-old London resident, who was looking for a cheaper broadband plan as she has disability and is on benefits, told Which? that she spoke to several telecoms providers who did not inform her about social tariffs or any deals available for vulnerable customers.  She has now found a suitable offer with BT but says that their social tariff offering was not clear when she first looked at their website.

She said: “Ofcom should make compulsory for each provider to have the vulnerable policy and apply it effectively.”

Right of replies

A BT Consumer spokesperson said: “We’re dedicated to keeping our customers connected and committed to supporting all our customers across the UK who are on low-incomes or facing financial hardship. We offer fast, reliable connectivity with Home Essentials to eligible customers who are struggling financially and urge anyone who qualifies for our at-cost, social tariff to get in touch, whether that’s on the phone, online or in one of our stores.

We have one broadband social tariff that caters for the needs of eligible customers across our three brands and Plusnet and EE customers can move to Home Essentials penalty free. We are launching EE Mobile Basics, a social mobile social tariff very soon.”

A KCOM spokesperson said: “As a responsible broadband provider committed to digital inclusion and making sure that no-one is left behind when it comes to online access, we’ve been one of the most proactive UK providers raising awareness of our Flex social tariff through the local media.

“In May we reduced the price of our unlimited data Flex package to £14.99 and was one of the first UK ISPs to introduce Open Banking technology to allow people to apply online. This means customers can find out if they are eligible for our social tariff within minutes.

“Since relaunching Flex six months ago, we’re pleased to say the number of customers using it has more than doubled and we remain committed to helping people through the cost of living crisis.”

NOW and Sky spokesperson said: “We’re focused on providing support to our customers and colleagues who need it most. We encourage customers who are struggling financially to get in touch with us so we can work out how best to support them.”

A Shell Energy Broadband spokesperson: “We offer some of the cheapest broadband packages on the market, at prices that are comparable to some of our competitor’s social tariffs – our fast broadband starts at just £18.99 a month. A dedicated social tariff is something we are looking closely at.

“We currently waive early termination charges for customers switching to another provider’s social broadband tariff, and there are a number of other solutions we offer to help households in financial difficulty, including tariff reviews, payment holidays and financial assistance from our £20m support fund.”

TalkTalk: In partnership with the Department for Work and Pensions, TalkTalk offers jobseekers six months of free broadband.

Virgin Media spokesperson said: “As one of the first providers to have launched a social tariff for those facing financial difficulty, we are absolutely committed to supporting customers struggling with the cost-of-living crisis.

“Uptake of our social tariff – the cost of which we recently reduced by 16% – has increased year-on-year. As announced in October, we are set to launch a faster alternative in the coming weeks to give customers greater choice and flexibility.”

A Vodafone spokesperson said: “We are proud to be the only UK operator to offer both a fixed and mobile social tariff (Vodafone Essential Broadband and Voxi for Now). Vodafone Essential Broadband is the same speed as our SuperFast1 product and meets the speed that Ofcom expects most consumers will need. Vodafone customers in a full fibre area will also be put on full fibre, ensuring they experience the best technology available in their area, regardless of whether they are on a social tariff or not. We would welcome help from Openreach in the form of a discounted social wholesale rate and from the Government in the form of VAT relief on social tariffs.”

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk.

Press Release: broadband, Cost of living, Rocio Concha