Older people risking broadband price hikes over switching fears, research says

Via Yahoo Finance

People aged over 55 in the UK are most at risk from broadband price rises because they are unwilling to switch providers, new research suggests.

A study by UK broadband provider Zen Internet indicates that 83% of broadband users aged 55 and over had not switched provider in the last year, if ever.

The research says, as a result, they are leaving themselves at the mercy of end-of-contract price rises.

According to Ofcom figures released earlier this year, about 20 million customers in the UK are already out of contract – including 8.8 million broadband customers – with many spending more than they need to.

It claims every day 25,000 broadband customers come to the end of their contract, which usually leads to an automatic price hike as they continue on a monthly rolling deal.

New rules introduced in February mean phone, broadband and pay-TV customers must now be alerted when their current contract is coming to an end.

Zen Internet’s research found that 36% of those who had not switched said it was because they feared they would get a worse service elsewhere – a figure which rose to 43% among the over 55s.

In contrast, the study indicates younger people – those aged between 16 and 24 – were far more open to switching providers, with 55% having done so in the last year.

Richard Tang, founder and chairman of Zen Internet, said: “For years the broadband industry has taken advantage of consumer inaction and fears of switching by hiking up prices at the end of contracts and sometimes even during – the so-called ‘loyalty tax’.

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“While recent Ofcom legislation has made it easier for everyone to be more aware when their contract is ending, most providers will still bump up the cost if consumers don’t act.

“Even in today’s climate, consumers should not be afraid to search for the best provider – one that will deliver a great and reliable service, and avoid the price increases that can add up over time.”

Zen’s research suggests fears over switching providers are unfounded in many cases, with nearly half (46%) of those asked saying they found the process easier than expected.

“Reliable broadband should be a given, but sadly some consumers are in the unfortunate camp of receiving poor and patchy service at a time when it’s needed the most,” Mr Tang said.

“Despite the current situation, switching is as simple as it’s ever been and those out of contract should be looking to make that change now. For those still in contract, it’s useful to be aware of when the contract is coming to an end so they can be prepared to move when it does.”