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Broadband prices set to rise

Broadband prices set to rise

Category: Broadband

Updated: 11/11/2016
First Published: 11/11/2016

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Broadband is no longer one of those things that's "nice to have" – these days, it's an all-out necessity. As such, it'll come as disappointing news that the cost of this modern day essential is set to rise, with many providers seeing recent rule changes as an excuse to ramp up prices.


The new rules

As of 31 October, new rules were introduced which changed the way broadband could be advertised. Previously, most adverts displayed the price of broadband and line rental separately, with the broadband cost – which was typically low or free in many cases – often taking precedence. This meant people weren't always aware of what the true cost of their deal would be, with many being enticed by the offer of "free" broadband without fully understanding the extra costs and elements of the deal (such as an introductory offer, contract length, line rental and one-off charges).

Given that line rental – which often takes up the bulk of any broadband deal – tends to cost around £17-19, many felt this form of offer-led advertising was misleading, as it would be difficult to calculate the eventual cost. The Advertising Standards Authority (ASA) agreed, and so from now on, broadband advertisers will need to abide by tough new guidelines, with the previous advertising format likely to break ASA rules.

Since the end of October, broadband ads that include price claims should abide by the following guidelines:

· They should show all-inclusive up-front and monthly costs, without separating out line rental, so the offer of "free" deals shouldn't be the most prominent.

· Instead, greater prominence should be given to the contract length and any post-discount pricing.

· All up-front costs should be clearly highlighted, so there are no nasty surprises when the customer enquires.

But why are costs going up?

The new rules sound pretty good, as it means it should now be a whole lot easier to work out exactly what you'll pay for any broadband contract, and you won't be misled by claims that don't live up to expectations. Comparing deals should be much simpler, too, and you'll get a better idea of what you'll be paying after any discount periods have come to an end.

So why are costs going up? Well, according to Broadband Genie, many providers are taking the opportunity to sneakily raise prices. After all, if people never really knew what they were paying beforehand, what's to stop them from hiking the cost? As a result, you could find that you're paying more for a deal than you would have done just two months ago.

For example, the figures show that you'd now pay £275.40 for the first year of a typical broadband package from TalkTalk (including line rental and other fees), whereas in September you'd have paid £244.15 – equating to an increase of 11.35%. Similarly, Plusnet has hiked its prices from £222.87 for the first year to £252.87 (up 11.86%). But the biggest culprit is Sky, who will now charge you £278.75 for the first year – a whopping 21.52% more than you'd have paid in September (£218.75).

Virgin Media has hiked its prices by the smallest amount (by 3.01%), but it'll set you back the most of all those investigated, with the typical cost for the first year standing at an eye-watering £398.99. Similarly, BT has only upped its costs by 3.26%, but you'll still be faced with a first-year bill of £309.87.

Overall, the cost of a typical broadband package has increased by 8.9% in just two months, with the average annual cost now coming in at £292.81, a notable increase from the £266.75 you'd have paid if you'd arranged the deal in September.

Of course, that's not to say that you can't still find a good deal. Many packages will still offer vouchers, cashback or other gifts as an incentive, but just make sure you're not too easily swayed –compare the options thoroughly, ideally by using our broadband comparison tool, and only ever go for the package that you really need. That way, you could beat the price hikes and still get a broadband deal that's perfect for you and your household.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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