Millions of people across the country may be paying £50 every month when they don’t have to – and not realizing it – due to a quirk in their mobile phone and broadband contracts. But Martin Lewis has advice for conscious consumers to cut their monthly phone bill to just £8.
The founder of the Money Saving Expert website has warned 14 million people they could save around £100 a month on their fixed costs if they knew how to get the best deal on their phone and broadband contracts. While many phone customers are facing an 8 per cent price increase mid-contract, Martin Lewis said it was not a promising situation for consumers, but millions of people with out-of-contract contracts could reduce this cost.
Mr Lewis said in his weekly email: “Broadband and mobile companies often write into their contracts that they will increase costs by 3 percent above inflation every April. This is bad for consumers. This feels unfair as there is no direct link to these increases as the increases are fixed costs and are inflationary by definition (i.e. increases above inflation) increases inflation, which means larger increases each year – a vicious circle).”
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This method of increasing prices provoked the reaction of Martin Lewis: Which one? and Citizens Advice in the past, an issue the Money Saving Expert founder has discussed with Chancellor Jeremy Hunt but has yet to see progress on. Market regulator Ofcom is understood to be exploring a “pounds and pence” approach, where increases could be calculated in hard numbers rather than a percentage that causes inflation.
How to cut your phone bill and save hundreds
When people sign up for a phone contract, they typically pay a large monthly fee to cover the cost of their cell phone. However, millions of people pay more for this contract after the price of the mobile phone is paid.
Getting a SIM-only deal can greatly reduce this fixed monthly cost, saving some savvy shoppers more than £500 a year on their phone bill.
Martin Lewis explained on his podcast: “Check if you’re one of the 14 million people out of contract and you’re free to switch. Changing the ‘Info’ text to 85075 for free is an Ofcom-regulated scheme that firms must comply with, to see if you’re out of contract.” I’m telling you.
“A few companies will then say they want your birthday to verify you, which is great, that’s part of it, that’s okay too. My rule of thumb: If they tell you they can’t give you that information, if you haven’t done anything with your mobile phone for a few years they’re almost certainly switching.” You are free.”
The only phone contract holders for whom this method won’t work are those with multiple phone contracts, which can make it difficult to switch to a lower plan.
Once you figure out you’re free to switch, you can probably get a SIM-only deal that will add more mobile data to your contract.
Mr Lewis continued: “Step two, off-contract, if you’re paying more than around £8 a month… you can get a 100GB SIM for £8 a month, taking into account all the promotional vouchers and stuff. Or £6 a month.” They give 50 GB in return, so you have to see ‘can I do this much faster, cheaper and easier’.
“The easy way to do this is to go on a comparison site. The best deals are often short-term promotions on comparison sites; they’re not offered directly because this is where companies can spend their marketing spend to give you a £50 Amazon voucher.”
“If you’re paying £10 a month and you get a £50 Amazon voucher, if you factor that into cash over a year, that suddenly reduces the cost involved quite significantly.”
If you want to protect your phone signal, there are only four network providers in the UK; so you can check an online phone signal tool to see what other providers may work in your area.
How to cut your broadband bill and save hundreds
Unless you’re using your broadband for a lot of devices, and they’re not all streaming HD video or downloading files, you probably don’t need high-speed broadband.
He said on the Martin Lewis Podcast: “Unfortunately there is no easy way to say ‘am I out of contract’, it just depends on how long you’ve been involved with the broadband provider.
“The general rule is that if you’re paying more than £30 a month and you’re out of contract, you can probably save money – and most people pay £40 or £60 a month. The only exception to this is if you’re one of those people who need overclocking to get home, you may have to pay more.” “
One Money Saving Expert follower, Mikey, said he saved £576 a year by switching from his usual internet provider.
Mr Lewis said: “It’s all about short-lived promotions, they normally last a day or two, they’re on comparison sites, companies want to win some business, they’re willing to pay for the business, what they do is keep them on the same tariff but they use up their marketing budget to try to get you Amazon They provide marketing incentives such as coupons.”