Cost of Living: Mobiles & Prepayment Meters
Published on 25 April 2023 10:39 AM
Are you paying too much for your mobile phone?
Research carried out by VirginO2 has identified that too many people are paying too much for their mobile phone contracts, at the end of their contract period that they are tied into. This is an issue that is particularly affecting over 65s.
Abi Wood CEO Age UK London is going to be taking part on a panel at an upcoming media event to discuss the issue alongside a representative from the Good Things Foundation.
The problem:
Millions of consumers are tied into bundled phone contracts that combine the cost of the handset with the cost of their airtime (data, minutes and text). It sounds wonderfully simple but this simplicity can also be a smokescreen that leads customers overpaying for the same thing.
The main issue is what happens at the end of a customer’s contract. When it ends, after say 24 months, the consumer will have paid for their handset. It’s theirs – they own it. It’s like paying off your mortgage – the house is now yours. BUT rather than recognise that, and reduce monthly payments, other operators continue to charge their customers the same amount each month.
Put simply, consumers are being charged every single month for something they’ve already paid for and own outright. You wouldn’t pay for anything else twice, yet this is exactly how these contracts are structured.
Research has highlighted that this is an issue disproportionately impacting over 65’s.
A key stat from the findings shows that 60% of over 65’s have been out of contract for over a year.
Over 65 respondents:
4 in 10 (41%) report not knowing how much they pay for their mobile phone each month
One third (33%) pay £20 or more a month for their phone contract
60% of respondents over the age of 65 have been out of contract for over a year – making them most likely to overpay for handsets they own
45% aren’t clear when their mobile phone contract ends
47% of respondents delay upgrading due to the perceived hassle, 53% said it was due to the cost (even though switching to a SIMO is cheaper)
28% have never read their mobile phone contract, the second least likely to read it behind the over 65’s 28%
81% of respondents aren’t aware that price rise, on a bundled deal, is applied to the whole bill (including the device)
88% of respondents think it’s unfair that they keep paying the same amount once out of contract
59% are wanting to save on their mobile phone bills
86% report feeling ripped off
87% think they should be automatically switched to a cheaper deal once their handset has been paid off
90% want clearer phone contracts
Recommendations
Some people pay for their mobile phones on a 'pay-as-you-go' basis, buying extra credit to top up their data and minutes. This is straigtforward - when you no longer have any data or minutes left, then you can easily top them up.
Some people, however, are on a mobile phone contract which is set at 12, 24 or 36 months. This contract provides mobile customers with a handset and a monthly allowance of calls, data and texts. If you are beyond the time that you are tied into the contract, we'd recommend that you contact your mobile phone provider and ask them if they have a better rate that you can switch to. Or shop around! It's easy to transfer your phone number to another provider.
For more information, we'd recommend the following articles:
You might also be interested in attending our online Tech Break Get Togethers. They take place once a fortnight and share useful information to help you become more confident using your mobile phone, tablet or pc.
Are you on a prepayment meter?
The government announced in March this year that those on prepayment meters should no longer pay more than those who pay by direct debit or standard credit for their energy - which is the case right now.
If you pay for your energy using a prepayment meter for your gas and electricity, this should be good news for you. It means that you will no longer pay more than those households paying by direct debit.
If you have a traditional analogue (not digitial) prepayment meter, if you haven't already claimed discounts of up to £400 on their energy costs under the energy bills support scheme, you can do so until 30 June.
This artice explains more about what to do: