Telecommunications

Nearly 6 million UK households ‘struggle to pay telecom bills’ | Telecommunications industry

Nearly 6 million UK households are struggling to pay their mobile, landline and broadband bills, with cost of living pressure forcing many to cut back on essential expenses such as food and clothing, cancel or change a service, or miss payments to stay connected.

A report by consumer group Which? estimates that 5.7 million households experienced at least one ‘affordability problem’ in April, as cash-strapped households struggle to cope with soaring bills and other costs .

Consumers are increasingly under pressure from the cost of living crisis – inflation is at its highest level in 40 years and energy bills are expected to soar to £3,600 a year this winter – more and more more households are struggling to afford the essential telecommunications services they previously took for granted.

Analyzing data from regulator Ofcom, Which? found that 3.5 million households cut spending on other essentials such as food and clothing in April to pay their telecom bills. That’s up from 2.2 million in February.

“The fact that millions of households have made sacrifices to prioritize their broadband and mobile connections during the cost of living crisis shows how essential these services are for everyday modern life,” Rocio said. Concha, Director of Policy and Advocacy. which?.

The affordability crisis disproportionately affects those on the lowest incomes: households with annual incomes of up to £25,999.

The report found that 22% of low-income households were forced to cut spending elsewhere to afford connectivity services in April. That figure was 13% among middle-income households – those with an annual income of £51,999 – down from 7% in February.

Who? said the government should reduce the VAT rate from 20% on telecom bills to 5%, in line with other essentials such as gas and electricity. The organization points out that even the most financially vulnerable customers, those eligible for specially reduced social tariffs, are charged 20% VAT.

“To help reduce billing costs, the next prime minister should reduce VAT paid on online telecommunications along with other essential services,” Concha said. “Businesses need to support anyone struggling to pay their bills and ensure consumers are informed and able to access the best deals.”

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Earlier this year, the UK’s largest telecoms companies raised their bills by almost 10% – the rate of consumer price index inflation in January plus 3.9%. While telecom companies have been criticized for pushing higher this year, it happened before inflation hit a 40-year high and the real impact of soaring prices for food and energy has started to take its toll on households.

Last week, BT said higher prices for broadband and mobile phone contracts helped the company return to sales growth in the first quarter. He pledged to continue implementing above-inflation increases next year to cover rising costs and investments in rolling out fiber broadband across the country.

In June, the UK’s biggest mobile and broadband companies – including BT, Virgin Media O2, Vodafone, Three, Sky and TalkTalk – agreed a plan at a government-led summit to helping customers who are struggling to pay their bills, including measures to enable switching to cheaper deals without paying a penalty.