Mid-contract price rises: households £210 worse off

15th February 2023

• Millions of families are facing a £210 a year rise in the cost of their mobiles because of a hidden deal that allows phone giants to hike prices by 17% mid-contract.

The extra charges, which come into effect in April 2023, will vary by provider. Some will put their prices up in line with the Consumer Price Index (CPI) plus an additional 3.9%, which on figures released this week could mean a 14.4% rise.

But others will use the now-discredited inflation measure the Retail Prices Index. This is usually much higher and could lead to eye-watering contract price hikes of 17%. 

We’ve developed a free online calculator at nous.co/mobile-hikes which allows families to find out exactly what new charges they will face in two months’ time.

Our online tool allows you to input your monthly costs and mobile provider to calculate what your new payments will be and how that affects total household finances.

Currently, the average mobile bill in the UK is £25.62 a month. For a typical family household of mum, dad, and two kids, with four mobile contracts, a rise of 17% means a huge increase of more than £17 a month and almost £210 a year. 

The mid-contract hike is based on the January inflation figure plus up to 3.9% on top. It comes because of a much-criticised deal with government telecoms watchdog Ofcom, which allows mobile service providers to put prices up in the middle of a contract, providing customers are told when they sign up.  

The price increase on millions of contracts will give a multi-million-pound windfall for firms such as Vodafone, O2 and EE.

Consumer champion Greg Marsh, founder and CEO of Nous.co, explained: “These types of mid-contract price rises are nothing short of licensed robbery by the phone giants, with poor customers the losers. How Ofcom ever agreed to allow this sort of RPI-based rise plus a big lump on top is mind-boggling.

“When inflation was running at around 3%, while this was a ruse, it wasn’t quite so dire for customers. But now we are looking at serious increases, which makes this behaviour by large phone companies egregious.

“Even if inflation falls over the next 12 months (which is far from certain) by the end of this year, mobile costs will be set based on a rate nearly three times that. And many people are now locked into contracts of up to 24 months.

“It’s important, especially in the midst of a cost-of-living crisis, for households to know exactly what increased costs they are facing and also when they might be able to get out of their contracts and hopefully shop around for a better deal.”

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