Price rises that are linked to future inflation rates have been banned by Ofcom.
The rules apply to new contracts for UK phone, broadband and pay TV services from January 2025.
The communications regulator said that any price rise written into a customer’s contract will need to be set out in pounds and pence, and providers must be clear about when any changes to prices will occur.
It comes after an increase in complaints from customers about large, unexpected price rises at a time when other bills were also going up.
Ofcom said that many providers had changed their contract terms in recent years to include annual price rises linked to inflation on top of a standard 3.9% increase. This meant that customers were unable to budget for future price rises.
As of April 2024, around six in ten broadband and mobile customers were on contracts subject to inflation-linked price rises.
“With household budgets squeezed, people need to have certainty about their monthly outgoings,” said Cristina Luna-Esteban, Ofcom telecoms policy director. “But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation.
“We’re stepping in on behalf of phone, broadband and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily and take advantage of the competitive market we have in the UK.”
