Some UK mobile networks increase the cost of your mobile phone contract with RPI or CPI inflation each year. Find out more about mid-contract price rises.

In the UK, some mobile networks will increase the price of your contract every year. This can mean the monthly price of your mobile phone contract going up with there being no option for you to end your contract unless you pay an early termination fee. This price increase is normally calculated from RPI or CPI inflation and can mean a regular annual increase of a few percent to your mobile phone bill.

In this article, we’ll discuss the mid-contract price rise policy on different UK mobile networks. We’ll also look at the interplay between this and capped contracts, discounts you may receive on your phone bill and Ofcom’s legislation around this.

Mobile Contract Price Rises

Many mobile phone contracts will increase in price every year with RPI or CPI inflation.

In the UK, some mobile networks will increase the price of your contract every year with inflation. This can mean the monthly price of your mobile phone contract increasing whilst you’re still tied in to the contract.

Most commonly, annual increases are based on RPI inflation (Retail Prices Index) but it can sometimes also be based on the CPI inflation measure (Consumer Prices Index).

In recent years, inflation-based price rises have averaged around 3-4% per year. Over the course of a 24-month contract, this can lead to your monthly phone bill increasing by about 7%. For instance, a £50 per month contract may actually rise to costing around £53.50 per month after two years.

Discounted Contracts

One area to watch out for very closely is the issue of discounts that are applied to your mobile phone contract. This is because discounts typically do not increase with RPI inflation. This means the overall price rise you experience man be substantially larger than expected.

To give an example, a £10/month plan could be structured in the contract as a £20 plan with a £10 discount. The price increase may then be applied to the £20 figure, whereas the £10 discount will remain the same. Assuming inflation of 3.5% per year, the monthly fee would increase to £10.70 the following year (£20.70 with the 3.5% price rise, less the £10 discount which is fixed). In this case, the price rise you’ve actually experienced on your contract is 7%, or double the level of RPI inflation.

These larger-than-expected price rises are often seen on discounted contracts that are offered through customer retentions or that are purchased during a sale. It may also occur when adding a student or staff discount to your plan.

Legislation

Ofcom (the UK’s regulator for telecommunication services) legislated in January 2014 to protect consumers against “unexpected mid-contract price rises”. At the time, many people had expected this to mean the end of mid-contract price rises on mobile phone contracts. However, the legislation unfortunately kept the door open for price rises happening providing the mobile networks detail this inside their contract.

In October 2018, Ofcom made it a legal obligation for all mobile networks to offer a spend cap on their contracts. This spend cap only applies to out-of-allowance charges and does not prevent the cost of your core monthly plan going up.

Price Increases: By Mobile Network

BT Mobile

For customers joining BT or upgrading their plan after the 11th January 2019, monthly prices will increase every year with CPI inflation (Consumer Prices Index). The price increase will take effect from March each year. This is stated on page 2 of the BT Price Guide and in the BT Mobile online help pages:

From 11 January 2019 if you’re a new customer or re-contracting mobile, broadband or landline, you’ll see new terms and conditions that tell you that your prices will increase by the Consumer Price Index (CPI) each year. This is an annual increase with the first increase impacting customers starting from March 2020.

Each year we will adjust the amount you pay per month according to the Consumer Price Index (CPI) rate of inflation. This rate is announced in January each year and we will adjust your bill by this amount in March of the same year.

If you joined BT before the 11th January 2019 and have not upgraded your price plan since that date, the annual CPI price increase will not apply to you. On BT, all of your discounts are taken into consideration when calculating the CPI increase.

Source: BT Price Guide
Tariff Information: BT Mobile Website

EE

On EE, the monthly cost of your price plan will increase every year with RPI inflation. This increase will take effect in March and will be calculated based on the cost of your price plan before any discounts are considered. For this reason, the actual price rise you experience may be higher than expected.

This information is stated in the small print on EE’s website:

On every EE contract the monthly price plan charge will be increased by RPI annually in March. The price increase will be based on your monthly price plan charge excluding any discounts. Other prices, such as call charges and Roaming costs, may also go up during your plan.

It’s detailed in more depth in clause 7.4 of EE’s Pay Monthly terms and conditions:

7.4 Your Price Plan Charge and, if applicable, the Charges for Additional Commitment Services include an annual price increase, which will be the annual percentage increase in the Retail Price Index (RPI) published by the Office for National Statistics. The increase will take effect in March of each year and use the RPI figure published in January of that year. If the RPI figure is negative, there will be no change to Your Price Plan Charge in the relevant year.

Source: EE Pay Monthly Terms and Conditions
Tariff Information: EE Website

giffgaff

On giffgaff, there are no regular annual price rises as you’re not signing up for a Pay Monthly contract. Instead, goodybag plans work as a Pay As You Go bundle. These bundles can actually be changed at any time, either to increase or decrease the monthly price or allowances.

In the past, goodybag price changes have generally been in the favour of consumers. For instance, the £10 goodybag now includes 3GB of data, but previously included only 2GB of data (and only 1GB before that). The increasing amount of competition in the Pay As You Go space means this trend is probably likely to continue over the next few years.

If you’ve purchased a handset from giffgaff and are paying for it in monthly instalments, you would have taken out a P2P loan from RateSetter. This is structured as a consumer credit agreement and payments will not increase with inflation.

Source: giffgaff Website
Tariff Information: giffgaff Website

iD Mobile

If you’ve joined or upgraded your plan on iD Mobile since the 15th June 2017, your monthly line rental will go up every year with RPI inflation. This price increase will take effect in April, and will be based on the RPI measure as announced in February.

The details of this annual price increase are stated on the iD Mobile website:

If you’ve upgraded or purchased a new 24-month plan with iD on or after 15 June 2017, your monthly line rental charge will be adjusted in line with the RPI rate of inflation each year. Your out-of-bundle charges won’t be affected though. They’re safe.

The RPI is announced in February, and your bill is adjusted two months later in April.

Source: iD Mobile Help: Retail Price Index
Tariff Information: iD Mobile Website

O2

On O2, your Pay Monthly airtime tariff will increase in price with RPI inflation every year. This price adjustment is detailed on the O2 website, and essentially means your phone bill will go up each April based on February’s published RPI index:

Each year, your Pay Monthly airtime tariff will be adjusted according to the Retail Price Index (RPI) rate of inflation. This rate is announced in February and your bill will be adjusted by this amount in April.

From April 2018 onwards, as well as changes to your monthly airtime bill, we also increased charges for calls outside your monthly allowance (not applicable to business customers). Charges for international calls and other additional services were also changed – unless you have a business tariff or mobile broadband tariff.

If you have an O2 Refresh plan, it will be split into two parts. Only the airtime part of your tariff is subject to an RPI price increase. The monthly payment for your phone is a separate consumer credit agreement and is therefore not subject to an RPI increase.

If you choose a non-Refresh plan (offered by third-party retailers like the Carphone Warehouse), the RPI increase will apply to your entire monthly payment. This may make it advantageous to choose the O2 Refresh version of the same plan.

Source: O2 Help & Support: Price Changes
Tariff Information: O2 Website

Plusnet Mobile

On Plusnet Mobile, mobile phone plans with a minimum term will increase in price every March with CPI inflation. Accordingly to the Plusnet website, this shouldn’t apply to 30-day rolling plans or plans taken out before the 29th November 2016:

All our mobile plans will go up in price every March, as described in this guide, unless you:

  • have a rolling monthly SIM only plan with us (if you’ve got a SIM only plan that has or had a minimum term, it’ll still go up each March)
  • have a mobile phone plan, or SIM-only plan which had or has a minimum term that you signed up for before 29 November 2016 and you haven’t changed your plan since then (that includes things like upgrading your mobile phone, agreeing a new minimum term or changing your plan on or after that date)

The price rise will take place in March each year and will be based on the CPI inflation rate as published in January.

Source: Plusnet Help: Price Increases for Plusnet Mobile Plans
Tariff Information: Plusnet Mobile Website

Sky Mobile

Sky reserve the right to change their prices at any time, but when they do, customers are given the opportunity to exit their contract with no early termination charge. Because of this, we don’t expect there to be any inflation-related price rises on Sky Mobile.

From the Sky Mobile terms and conditions:

Prices may increase and services may vary, including during your minimum term. If we increase your monthly subscription price you may cancel your subscription without early termination charge. Other prices and services may also vary. We will let you know about any material changes before we make them. Details of call rates and optional charges can be found on sky.com.

Source: Sky Mobile: Terms and Conditions
Tariff Information: Sky Mobile website

Tesco Mobile

At the time of writing, Tesco Mobile is the only remaining mobile network to guarantee that your monthly subscription charge will never increase during the minimum term of your contract. This is detailed in the Tesco Mobile Tariff Promise:

When you join Tesco Mobile on pay monthly, we promise you that we’ll never raise your tariff price during your contract.

Never have, never will.

Every little helps.

Source: Tesco Mobile: Our Tariff Promise
Tariff Information: Tesco Mobile Website

Three

If you’ve taken out a Pay Monthly handset plan since the 29th May 2015 or a Pay Monthly SIM card from Three since the 13th December 2018, it will be subject to an annual RPI price increase. This is detailed in Three’s price guide and support centre:

If you choose a monthly Advanced Plan Package, your contract with us includes the right to increase your Monthly Charge (within your Minimum Term) on an annual basis each May, by an amount up to the January Retail Price Index (‘RPI’) rate. This means that each May, your Monthly Charge will increase by an amount up to the January RPI rate (published each February) unless you agreed to a new SIM Only plan before 13th December 2018, in which case your monthly charge will stay the same. If the January RPI rate is negative, there will be no change to your Monthly Charge in the relevant year.

Source: Three Pay Monthly Price Guide
Tariff Information: Three Website

Virgin Mobile

Customers on a Virgin Mobile Pay Monthly contract will see the price of their plan increasing in July each year. The increase will be calculated based on the rate of RPI inflation as announced in April:

Each July your airtime plan will increase by the Retail Price Index (RPI) rate of inflation announced in April of that year. We’ll give you 30 days’ notice of the exact increase.

If you have a Freestyle price plan, your plan will be split into two parts: a payment plan for your mobile phone and a separate contract for your airtime. Your mobile phone payment plan is actually a consumer credit agreement so isn’t subject to RPI increases. Only the payment for your airtime will increase with RPI inflation.

Source: Virgin Media Website
Tariff Information: Virgin Media Website

Vodafone

If you’ve taken out a Pay Monthly contract with Vodafone since the 5th May 2016, it will be subject to an annual price rise in line with RPI inflation. This increase will happen in April and will be based on the RPI figure published in March.

From Vodafone’s website:

All new Pay monthly contracts taken out on or after 5 May 2016, and Mobile Broadband contracts taken out on or after 28 September 2016 (including upgrades), have an annual price adjustment in line with the Retail Price Index (RPI).

For consumer contracts, we use the RPI figure published by the Office for National Statistics in March and apply the change in April each year.

If your contract was taken out prior to the 5th May 2016, it will be covered by a Fixed Price Promise and will not be subject to an annual RPI price rise.

Source: Vodafone: Retail Price Index Price Adjustments
Tariff Information: Vodafone Website

Beyond the price rises that are listed in your contract, mobile networks also reserve the right to increase prices further at any time. However, if they choose to do this, they’ll need to give you 30 days written notice as well as the opportunity to exit your contract penalty-free.

Early Exit Fees

If your mobile phone contract is subject to a mid-contract price rise, and if that price rise was described in the contract at the point when you began it, you’ll unfortunately be unable to exit your contract without paying the relevant early termination charge that is applicable to your contract.

If your mobile phone provider increases the price of your contract by more than what is stated within the terms, this will normally give you grounds to exit your contract early without charge. It is typically quite rare for this to happen on mobile phone contracts, but has occasionally happened in the past for landline and home broadband providers.

More Information

For more information about the price rises that apply to your mobile contract, please refer to the terms and conditions on your mobile network’s website. The BBC News website also has further details about how inflation is calculated and the latest inflation-related news and predictions.

Your Comments 18 so far

We'd love to hear your thoughts and any questions you may have. So far, we've received 18 comments from readers. You can add your own comment here.

  • MARTIN JONES said:

    hi,
    I signed a 12 month sim only contract with three in march 2018 which specifically stated no annual inflation increases.Received a text this week saying three were increasing my monthly bill by 2.5 rpi. I have spoken to three and they say as this is a change to terms and conditions i can cancel without the thirty days notice but the inflation increase will otherwise be applied.I have another option of signing a new cheaper12 month contract with annual rpi increases specified. Three seem extremely anxious to remove customers from inflation freecontracts.

  • Danny butler said:

    I’m extremely confused by this rpi price rise can someone explain to me what the cost to the networks is ?? I mean if our price is going up then surely that’s because this rpi is costing the network money or are they just putting price up because they can …I’m on my first contract sim only with three and always assumed the price can’t go up during contract this is all confusing and no amount off Google is helping :/

  • Mrs Greenwood said:

    Hi, interesting article! My 24-month mobile contract only started in Nov- and now in less than 4 months, I received a price hike notification. I signed up over the phone and there was no mention of this policy of annual price hikes. The tariff rate was quoted to me as though it would stay the same for the duration of the contract: £12.99 pm for 24 months. The confirmation email did not mention it, and I did not receive a copy of their T&C’s in the post either.

    In this case, the mobile company has not sought out my consent to their T&C’s during the entire sales process. I just made a complaint to the company out of principle, as I do strongly believe that customers should have been told -explicitly- that prices are adjusted annually. For instance, instead of selling the contract as X pounds per month for 24 months, it should say it will be X pounds per month for 24 months, subject to an annual adjustment per our T&C’s.

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