When it comes to navigating the vast array of suppliers, offers and tariffs for insurance, broadband, television and other services, there is one strategy consumers are told to use to ensure they get the best deal – keep switching.
Although frequently seen as being a cumbersome and time-consuming process, moving from one provider to another has become the best way to avoid overpaying by hundreds of pounds a year.
For many older people, however, switching can be a struggle – and this results in them ending up with much bigger bills than necessary.
As elderly consumers try and fail to wrestle with an unfamiliar web-based switching culture, they are often left overpaying for services on what can be already stretched incomes. And while younger consumers typically realise that the more loyal you are, the more you pay, this can be counterintuitive to older people, especially when it comes to getting broadband and landline services.
A Which? study shows that customers who stay with the same broadband provider and don’t haggle for a better deal face overpaying up to £220 a year on average.
BT customers paid the biggest loyalty premium, with an average annual bill of £540 a year, against £372 for those who haggled. New customers typically paid around £320. Meanwhile, Virgin customers are also paying £540 but could reduce that to £384 by haggling. Longstanding TalkTalk and Plusnet users paid marginally more, while only Utility Warehouse offered its best tariffs to loyal customers.
Separate research from comparison site Broadband Genie found that most over-55s have never switched broadband provider. Many fear they are paying too much, but lack the knowledge or confidence to choose a new package and switch.
Among those who realised how unnecessarily expensive his bill was is 83-year-old David Jones*, a BT customer of 40 years’ standing from Ashtead in Surrey, who spends an hour online every day, plus a total of 10 hours a week watching iPlayer and Netflix via his broadband connection.
His monthly bill was £52.49. This was more than double the £23 a month he was paying in 2016, but the following year he was persuaded to switch to BT’s 50GB Superfast Fibre 1 Unlimited, dramatically pushing up the cost.
He had opted out of receiving paper bills from BT because of the £3 monthly charge, but found the website harder to understand and lost control of what he was paying. Jones took action after spotting an article in the Guardian and haggled his bill down to £35.99.
BT says he was on a time-limited deal for 18 months. “Once his contract was coming to an end he called us to discuss his options, which we always encourage our customers to do.”
Confusion is rife, with so many broadband, landline and TV bundles to choose from. Mark Pocock from comparison site Broadbandchoices.co.uk says the less digitally savvy are at a massive disadvantage, because they cannot access online switching services. “Many feel that they have to jump through too many hoops,” he says.
Switching for broadband can be more bothersome than it is for home energy or car insurance, as customers may have to pay up to £60 for installations or collections, and for delivery of a new router.
Some older people can feel daunted about setting up the equipment and, in some cases, having a visit from an engineer. Tariffs can also be much more complicated when it comes to broadband.
“Gas is gas no matter who you buy it from, but broadband, home phone and digital TV have differing services, content, equipment and terms,” says Dan Howdle from Cable.co.uk.
“The price you’ll pay after the offer period ends is front and centre both during the sign-up process and on the contract. Customers are warned 30 days in advance of any price rise, and can switch without incurring exit fees. Those who don’t, pay the price.”
The problem is that the responsibility lies entirely on the customer to monitor the market and switch or haggle, Howdle says.
Telecoms regulator Ofcom is concerned that many loyal broadband customers aren’t getting the best deal and is reviewing pricing practices.
In October, it brought in new rules demanding that firms introduce policies to identify vulnerable customers, including those with learning difficulties, or physical or mental illness, and offer help where necessary.
It followed this in December by announcing a range of actions to protect loyal broadband customers, including a new information campaign, Boost Your Broadband, to help people get faster, cheaper deals.
This year it plans to force broadband, landline, mobile and pay-TV companies to tell customers about their best available deal when contracts are coming to an end, and every year after that if they don’t switch.
It is also reviewing broadband companies’ pricing practices, examining why some customers pay more than others – particularly the elderly and those who struggle to shop around.
This spring, broadband and landline customers will get automatic compensation, without having to claim, for slow repairs, missed appointments and delayed installations.
Dani Warner, a broadband expert at comparison site uSwitch.com, says plans to notify customers when they approach the end of their minimum contract period cannot kick in soon enough. “Around one in three pay over the odds for broadband and this is likely to be even higher among vulnerable consumers.”
She is calling on Ofcom to help give consumers a clear view of what’s available, in a variety of formats – not just what their current provider is trying to sell down the phone.
Citizens Advice has also lodged a “super complaint” with the Competition and Markets Authority (CMA) after finding what it believes is rampant overcharging for broadband and other home services.
Amid the criticism, telecoms companies say they are taking action. BT says it regularly writes to customers with deals and information about how to upgrade to faster speeds, and is working to provide clearer information throughout the life of their contract.
“Vulnerable customers can call 0800 919 591 to get extra help and also give permission for someone else to contact us on their behalf,” it says.
Virgin Media says it highlights details of any time-limited discounts in contracts and monthly bills so they can switch deals at the end of the minimum contract term.
TalkTalk says it took a stand against unfair pricing two years ago, restructuring its business to reward loyalty, and proactively contacting customers approaching the end of their contract to encourage them to sign on to better deals. It says: “Loyalty penalties are wrong and we’ve changed our business model to tackle them.”
Alex Perrin, chief executive of ismybillfair.com, says haggling works, as three-quarters of BT customers who challenge their bill through the site got a better deal. “BT has been doing a good job in giving customers a fairer deal when they are challenged.”
However, the site’s research shows that four out of five people would prefer to get a fairer deal from their existing provider, rather than be obliged to switch. But that would mean an end to the switching culture – an unlikely prospect.
* Name has been changed
Still with BT … even after a shock rise in prices
Margarita Meepegama, 75, has been loyal to BT since 1987, and never changed her telephone supplier or even considered it.
In January last year she joined a trial for superfast broadband at £33 a month but once that ended her bill jumped to £69. It was a shock, especially as she hadn’t requested superfast but was offered it as a trial. “I used to complain the internet was a bit slow but I didn’t need it to be superfast. When the trial finished they wanted so much. Where was I going to get that money?”
Meepegama, who is retired and lives in east London, doesn’t watch TV online or download data, although she sometimes watches iPlayer. “I just use broadband for Facebook and Messenger to communicate with loved ones and relatives in the Philippines.”
She asked her granddaughter, Rachel, to contact BT on her behalf, and she got the price down to £53.48 a month for a package that includes anytime calls.
Despite it all, Meepegama remains loyal to BT, even though Rachel has been pushing her to switch. “I’ve never thought of changing. But they should consider decreasing my broadband payments,” she says.
