1.1m households struggling to afford broadband services

Around 1.1 million households (5%) are struggling to afford their home broadband service according to new research by Ofcom.

The number of households struggling rises to around one in ten among the lowest-income household with affordability problems likely to worsen in 2022 due to retail price increases and the wider squeeze on household finances, putting further pressure on those who can least afford it.

The research also found that millions of families under pressure from the rising cost of living could each save £144 on their annual broadband bills.

Special discounted broadband packages – sometimes known as ‘social tariffs’ – are available to an estimated 4.2 million households in receipt of Universal Credit.

But only 55,000 homes have taken advantage of these discounted rates so far – just 1.2% of those eligible. That means that millions of benefits recipients are missing out on an average annual broadband saving of £144 each.

Currently six broadband providers – BT, Community Fibre, G.Network, Hyperoptic, KCOM and Virgin Media O2 – offer at least one of these specially discounted deals. These packages are priced at between £10-£20 a month for broadband speeds ranging from 10Mbit/s to 67Mbit/s.

Ofcom is today calling on all other broadband firms to support struggling households by introducing their own social tariffs. We also want to see all companies promote these deals more widely, and make sure it’s swift and simple for customers to sign up.

Switching onto a social tariff could provide some financial relief for eligible households. For example, a standard commercial broadband package costs an unemployed person claiming Universal Credit an average of £27 per month – or 8.3% of their monthly disposable income. A £15 social tariff would almost halve their broadband costs and use up 4.6% of disposable income.

Despite the savings to be made, Ofcom’s research shows that the vast majority of benefits recipients (84%) are unaware of social tariffs, and take-up is extremely low.

Ofcom has found limited evidence of providers actively promoting their social tariffs to eligible customers with these deals generally not featuring in broadband advertising or price comparison website searches.

Lindsey Fussell, Ofcom’s Network and Communications Group Director said “People rely on their broadband for staying in touch, working and learning from home. But for those who are really struggling with rising bills, every penny counts.”

“Special discounts can make all the difference, and too many broadband firms are failing either to promote their social tariff or to offer one at all. We expect companies to step up support for those on low incomes, and we’ll be watching their response.”