Reducing the cost of broadband
When it comes to keeping bills low, it helps to keep broadband affordable. In this guide we’ll look at why tariffs get high and how to find better, cheaper options.
Broadband is a vital service utility that has a monthly contract that needs to be managed and budgeted for.
As another household expense, it’s often desirable to reduce this cost especially when many are paying more for broadband than is necessary.
Once a broadband contract ends it continues on a rolling basis and the tariff usually goes up. Customers who don’t renegotiate fresh terms or switch provider tend to pay more – known as the loyalty penalty.
How do I change my contract?
Changing starts with checking the status of your current broadband plan. If it still has time left on its agreement, you can’t usually leave it free of charge.
Contracts are typically set at 12, 18 or 24-month periods. This “minimum term” incurs termination fees at the provider’s discretion if cancelled during this time.
However, this may not apply if you intend to stay with a current provider but simply swap packages:
- renewal is signing a new contract with an existing broadband provider
- switching is usually moving to a different package from another provider.
The most cost-effective time to do either is as soon as your current contract’s minimum time has ended.
Can I manage a broadband contract on behalf of a friend or relative?
Most simply, the answer is yes. This is known as third-party bill management and Ofcom requires all UK telecoms providers to offer it.
You can then consult with the provider, receive bills and also pay those bills without being legally liable for them.
The person who wants you to manage their contract will need to speak to a customer service adviser to set this up, informing them that someone else will be speaking on their behalf. If possible, they should ask the provider to confirm they will note it down on the account so no one has to go through the same process each time.
Why switch provider?
Choosing to switch provider can be great for making the most savings because new customers always get the best offers.
By entering your address into a postcode checker on a comparison website like Broadband.co.uk you can quickly find and compare unlimited broadband deals. This is always the best way to price up packages that should be available in and around your home’s location.
Be aware that broadband contracts are often priced by speed, labelled in Mbps. Generally, the bigger this number is, the more expensive the package will be.
As a general rule you’ll only need enough speed to cover your household’s demands to avoid paying more than necessary:
- entry-level fibre broadband is easily adequate for single user, light usage
- family or shared homes with 4+ users will probably require more speed
- data usage allowances or “download limits” should always be unlimited.
If you are in any doubt, a more modest package can always be upgraded later – but generally not the other way around!
Why renew with your current provider?
As the easiest way to making savings, renewal is a popular option. It simplifies things because you’ll have no break in service and potentially no setup fees to pay.
Around the time of contract expiry, you should be notified, so contact the provider and say you wish to renew.
Although it’s unlikely you’ll be given the same deal offers or freebies as a new customer, the price should be identical.
Renewal does also continue a good service with a trusted provider so it’s worth weighing up this value too.
How to negotiate the very best terms
Be sure to use the market research you’ve already done. Look at what rivals can offer and at what price, using equivalent deals to benchmark your own offer.
You also don’t have to accept their first offer. Until you leave by switching, you’re still a customer on rolling terms so there’s time to consider things.
What’s more, if you tell a provider you’re thinking of leaving, then their retention departments may offer even better deals to persuade you to stay.
Calculate the effective monthly cost
Doing the sums and working out the actual full cost of a broadband package is essential. Off-setting any benefits or freebies against all the fees across a contract’s term will reveal the overall value:
(monthly cost x length of contract) + one-off fees – (discounts/length of contract) = effective monthly cost
Free gifts can prove a valuable incentive if they are things you buy or use anyway, offering big savings that are worth having.
Knowledge is power
To conclude, the common advice is to know your stuff. A little amount of informed research will go a long way in saving money on broadband:
- find and compare available deals across the market today
- consider the benefit of renewal versus switching
- calculate the true cost of attractive deals
- speak to the provider and negotiate!
Remember too that if you choose to switch and are not satisfied with the new provider, you have 14-days to cancel free of charge.
Photo by Greg Rosenke on Unsplash