Broadband social tariffs research

Summary

Social tariffs are cheaper broadband tariffs available to those in receipt of particular benefits such as Universal Credit, Personal Independence Payments (PIP) and Pension Credit.

At present, Ofcom calculates that just 3.2% of households receiving universal credit are on a social tariff. As part of our cost of living campaign, Which? conducted a survey with 2,000 eligible consumers to better understand why take-up is so low, and what would help more people take advantage of this vital support. We found significant barriers to uptake, specifically:

• Awareness of social tariffs is very low. 63% of eligible consumers had never heard of social tariffs. This is a significant barrier to uptake: half (51%) of those hearing about social tariffs for the first time through our survey said they are likely to switch, showing simply boosting awareness could make a big difference.
• But beyond general awareness, there are other significant barriers to uptake for eligible consumers. The main issue is perceptions of slower internet speeds. Of those aware of social tariffs but had not switched, 44% said the speeds offered were too slow - this was the most common reason for not switching. Slower speed was also a top potential concern of those eligible but who had not previously heard of social tariffs, cited by 42%.
• Other concerns among all those eligible included challenges exiting their current contract and possible exit fees.

To increase uptake, Which? is calling on broadband providers to properly advertise their social tariffs, to ensure they have a range of options for eligible consumers, and to ensure customers pay no Early Termination Fees when they change to a social tariff - including when they change provider.

Awareness is the main barrier to take-up of social tariffs

Of all eligible consumers, only 37% said they had previously heard of social tariffs. 63% were completely unaware they existed. When we then explained what social tariffs were, who they are for, and showed those previously unaware of social tariffs a list of social tariffs on the market at the time of survey, half (51%) then said they were likely to switch. This shows increasing awareness among many who are eligible could significantly increase uptake.

Perceptions of slow internet speeds are off-putting

While awareness is a significant barrier, many of those aware are still not taking advantage of the savings offered by social tariffs. Three-quarters (73%) of those aware of social tariffs are not on one, and 39% do not intend to sign up at all. Clearly then, other factors are putting eligible consumers off.

We found the top concern is slower internet speeds. Over two-fifths (44%) of consumers who are aware of social tariffs but not on one said a reason they had not yet switched was because the speeds offered were too slow.

Perceptions of poor internet speeds also appear to be putting some eligible consumers off of social tariffs altogether. For those aware of social tariffs, but who said they do not intend to sign up, poor internet speeds are significantly more of a concern compared to those who do intend to sign up. 54% of those who do not intend to sign up to a social tariff cite poor internet speeds as a reason why they have not switched, compared to 32% of those who say they do intend to sign up in the future. 

For those who had not previously heard of social tariffs, we asked them what a top potential concern about switching to a social tariff might be. Again, speed came out high in the list (42%), alongside contractual barriers (43%).

The other significant barrier for consumers is already being tied into a contract

Second to concerns about speed, consumers aware of social tariffs who had not switched state contractual barriers as a top reason why. 32% of aware and eligible consumers said ‘I couldn't leave my contract’. This includes people who said “I was already in a contract and so I couldn’t switch" and/or "I didn’t want to pay exit fees to leave my current contract".

For those who do intend to switch, contractual barriers were even more of a concern, compared to those who do not intend to switch. suggesting some consumers are delaying switching, and therefore potential savings, due to perceived contractual barriers. 

Finally, 43% of those previously unaware of social tariffs, the top potential concern of theirs when considering switching was already being tied into a contract. This suggests that for this group, after awareness, making sure it’s easy and costless to switch is critical.

Internet providers need to act

We have seen that two-thirds (63%) of consumers eligible for a social tariff are unaware they exist. For those who do know they exist, but have not switched, perceptions of slower speed is a top concern as to why, followed by potential contractual barriers. Yet those who are on a social tariff are overall very happy with the service provided: 92% said they are “very” or “somewhat” satisfied with their social tariff. Internet service providers therefore need to increase awareness and the attractiveness of their social tariff offers to the majority who are not on a social tariff to ensure more consumers are able and willing to take advantage of the savings.

Which? is calling on providers to:

1. Ensure that social tariff customers do not incur additional charges like set-up fees or early termination charges (ETCs) to move to a social tariff, even if they are moving to another provider.
2. Increase awareness of the availability of social tariffs to new and existing customers, what they offer, and how they differ to commercial tariffs.
3. Offer a range of social tariff options to ensure eligible consumers can choose the right connection for their household needs.