As many as one million people cut off their broadband in the last year as the cost-of-living crisis left them unable to afford Internet access, according to new research from UK charity Citizens Advice.

People receiving Universal Credit were badly affected. The research found them to be six times more likely to have stopped spending on broadband in the last 12 months amidst rising bills, compared to non-claimants.

The charity fears this problem could get worse. Where people claiming Universal Credit are still paying for broadband, they are more than four times more likely to be behind on broadband bills than those who aren’t.

Citizens Advice says these are worrying signs that a service that is increasingly essential for day-to-day life is becoming out of reach for people.

People on Universal Credit are among customers who should be eligible for discounted social tariffs to help them stay connected. However, as uptake of these tariffs is currently just 5 per cent, the charity claims these important discounts aren’t reaching those who need it.

The latest figures from Ofcom show 95 per cent of the 4.3 million eligible households are missing out on saving £200 (€230) on broadband costs each year. That is £824 million of support going unclaimed.

“People are being priced out of Internet access at a worrying rate,” commented Dame Clare Moriarty, Chief Executive of Citizens Advice. “Social tariffs should be the industry’s safety net, but firms’ current approach to providing and promoting them clearly isn’t working. The people losing out as a result are the most likely to disconnect.”

“The Internet is now an essential part of our lives – vital to managing bills, accessing benefits and staying in touch with loved ones. As providers continue to drag their feet in making social tariffs a success, it’s clear that Ofcom needs to hold firms’ feet to the fire,” she stated.

A Virgin Media O2 spokesperson said: “We continue to raise awareness of our social tariffs and over the last year we have cut the price of our social package – Essential Broadband; expanded our eligibility criteria; and made it faster and easier to sign up. We’ve given more than a million customers information about our social plans and last year saw a 424 per cent increase in uptake.”

“Having founded the National Databank with Good Things Foundation and committed 61 million GB of free mobile data for those in need, we’re ensuring that no one is left without connectivity. With too many people still struggling to afford essential broadband, we’re urging the Government to cut VAT on social tariffs and are committed to passing this on to customers in full.”

“The fact that one million people have disconnected their broadband in the last year because they couldn’t afford it a very worrying sign of the times,” commented Anita Dougall, CEO and Founding Partner at business consultancy Sagacity. “Broadband is no longer a ‘nice to have’; it’s an essential. There are a couple of elements at play here though: firstly, broadband providers haven’t always offered low-cost social tariffs. Unlike the water industry where customers are locked in and social tariffs are offered, broadband customers have always been able to switch providers if they can find a cheaper deal and they aren’t locked into an expensive contract.”

“Secondly, financially vulnerable people aren’t always forthcoming in asking for help, so providers need to proactively identify them, which poses a serious data challenge. Companies often don’t have the expertise to compile and analyse the data they need, and they don’t always have access to external data that can highlight if someone is financially vulnerable, such as benefits, pensions and affordability information.”

“Ultimately, though, identifying financially vulnerable customers and putting them onto an affordable tariff is possible, as long as providers get their data in order and seek outside help where needed. People rely on broadband to work and educate their children, and with Consumer Duty coming into play in July, it’s vital that providers get on the front foot about their strategies for identifying those who might be financially struggling,” she asserted.

“Soaring mid-contract price rises in the current climate have been too much for bill-payers to absorb,” suggested Alex Tofts, broadband expert at Broadband Genie. “Broadband is an essential service and the market has been slow to respond to the challenges customers are facing. These cancellations speak, not only to the recent double-digit bill increases, but also to the lack of awareness about social tariffs among many customers who need them the most. Providers must shoulder most of the blame for this. While some like TalkTalk are still not offering their customers these discounted deals, many that do have kept them hidden well away from their home pages.”

“The introduction of the new Smart Data Council, designed to help nudge consumers onto the best value deals, suggests the ship is slowly being turned around but much more needs to be done.”

“Households who are not eligible for a social tariff but struggling with their broadband costs should contact their provider as soon as possible. If they are out of contract they will also be able to save money by switching to another supplier.”

Table: Are broadband social tariffs being hidden away?

Source: Broadband Genie

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Categories: Articles, Broadband, Business, Consumer Behaviour, Markets, Policy, Regulation, Research, Telco

Tags: broadband, Citizens Advice