Yahoo Finance Millions of UK households struggling to pay phone bills, survey finds
The cost of living crisis has led to millions of people struggling to afford essential telecoms, a new report has found.
A new analysis by consumer group Which? found that nearly six million households are struggling to afford essential phone services.
The government needs to cut the amount of VAT paid on mobile, broadband, and telephone services, the study concluded.
The analysis found that to "help cut bills during the cost of living crisis, the next prime minister should reduce the amount of VAT paid on telecoms from 20% to 5%, to be in line with other essentials such as gas and electricity".
An estimated 5.7 million households had affordability issues that forced them to cancel telecoms services and miss payments to these utilities, according to Which?’s analysis of Ofcom survey data.
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The number of households struggling with these affordability issues increased to 20% in April 2022, up by a fifth from 16% in February.
The number of households having to make more than one financial adjustment to afford their phone services increased by 56% between February and April 2022.
The most common financial adjustment was that households reduced spending on other essentials to be able to afford telecoms services.
The study found that in March 2022 an estimated 3.5 million households reduced their spending on other essential items, such as food and clothes — up from an estimated 2.2 million in February.
Rocio Concha, Which? director of policy and advocacy, 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.
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“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 Ofcom survey found that 3% of households had cancelled telecom services, up from 2% in February 2022.
Households with lower and middle incomes were the most likely to have cut essential spending to cover the cost of telecoms.
One-fifth of middle-income households and and one-eighth of lower-income households had to reduce spending elsewhere to afford connectivity services in April 2022.
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The Which? analysis was based on data from Ofcom’s Communications Affordability Tracker which has surveyed approximately 1,000 consumers every two months since June 2021.
There were 1,091 responses to the survey in February 2022 and 1,067 in April 2022. The most recent data was for April 2022. Only essential connectivity services such as mobile phone service, fixed landline telephone, and fixed broadband were included in this analysis.