Monday, August 15, 2022
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Nearly 6,000,000 households struggling to afford phones or broadband

The number of households experiencing ‘multiple affordability issues’ has increased by 56% since February (Picture: Getty Images)

Nearly six million households are struggling to afford using their phones and broadband in the latest sign that the cost-of-living crisis is descending to new lows.

A major consumer group called on the Government to cut VAT on household telecoms bills after the new figures were released.

The grim statistics come as new projections show that the UK is on course for a recession, amid major concerns about energy bills forcing more people into poverty this winter.

Meanwhile, new forecasts suggest inflation could rise by a eye-watering 15% next year.

Ofcom data showed that an estimated 5.7 million households are facing financial difficulties impacting essential communication services such as their mobiles, broadband and landlines.

It said that in April, those households took measures including reducing spending on other essentials, cancelling or changing their service or missing payments.

The number of households experiencing ‘multiple affordability issues’ – like struggling to afford more than one telecoms service or making more than one change to their finances to afford telecoms – increased by 56% from February to April, the figures show.

When it came to other essentials, like food and clothes, there was a 59% increase, the data suggested.

The latest grim statistics come as the UK was projected to go into recession (Picture: PA)

An estimated 3.5 million households reduced their spending on those items, to afford their connectivity services in April, up from an estimated 2.2 million in February.

In all, some one in five less well off households (22%) reduced spending elsewhere to afford connectivity services in April.

In middle income families the figure was 13% – almost doubling from 7% in February.

Which? said the fact that so many households had chosen to prioritise their telecoms services during the cost-of-living crisis ‘further demonstrates just how essential these services are to modern life’.

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Its director of policy and advocacy Rocio Concha said: ‘The fact that millions of households have made sacrifices to prioritise their broadband and mobile connections during the cost-of-living crisis demonstrates just how essential these services are for day-to-day modern life.

‘To help cut bill costs, the next prime minister should reduce the VAT paid on telecoms in line with other essential services. Businesses must support anyone struggling to afford their bills and ensure consumers are aware of and able to access the best deals.’

The watchdog suggested that the essential nature of communications is not reflected in how the services are taxed.

It urged the next prime minister to reduce the amount of VAT on telecoms from 20% to 5%, to bring it in line with other essentials like gas and electricity.

Which? also noted that even the most financially vulnerable consumers were charged 20% VAT for social tariffs.

It estimates that reducing the VAT rate on telecoms to 5% would save the average household £120 per year.

Which? has also urged providers to support any customers struggling to afford their bills and to make them aware of any discounts they may be eligible for.

Elsewhere, the Resolution Foundation think tank warned yesterday of further misery to come.

‘It is now plausible inflation could rise to 15% in the first quarter of 2023,’ it said.

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MORE : ‘It’s not fair that we have to pay a premium’: Woman with coeliac disease reveals struggles of pricey gluten-free food during cost of living crisis


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