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Millions of broadband, mobile and mortgage customers overpaying by up to £1,144 a year – how to fix

MILLIONS of people across the country are overpaying on their bills by staying loyal with their mortgage and utility providers.

According to data released by Citizens Advice, one in seven are still paying the loyalty premium across the broadband, mobile and mortgage markets.

Millions of Brits could save by switching broadband, mobile and mortgage providers.


Millions of Brits could save by switching broadband, mobile and mortgage providers.

The charity has discovered that nearly 10 million people across the UK are overpaying these bills by more than £1,000 a year, on average.

People are paying an extra £61 for broadband, £83 for mobile and £1,000 more on their mortgage.

While all telecom firms send end-of-contract notifications, and a breakdown of airtime and handset costs for mobile tariffs – some don’t. Once the handset has been paid off, most firms stop charging for the handset, but some don’t.

For customers on bundled contracts who’ve been out of contract for three months, EE gives a 10% discount.

Vodafone offers a £5 monthly discount for contracts over £11 taken out before June 2021. Customers who took out bundled contracts after June 2021 are charged separately for airtime and handsets and will no longer pay the loyalty penalty. Three does not give a discount.

However, millions ignore these contract notifications and changes and just let their tariff roll over when they’re likely to be able to get a better deal elsewhere.

The loyalty penalty is the difference between what loyal and new consumers pay for the same service.

The news follows the financial regulators’ decision to ban the loyalty premium for car and home insurance customers back in January.

The move was in response to a super complaint launched by Citizens Advice back in September 2018.

However, the charity is arguing that regulators haven’t gone far enough.

Dame Clare Moriarty, chief executive of Citizens Advice, said: “The government did the right thing by strengthening its cost-of-living help, but finally fixing the loyalty penalty could put more than twice as much money back in some people’s pockets as the £400 October energy grant.

Annual loyalty penalties for mortgage holders sit at £800 million, £451 million for broadband customers, and £83 million for mobile customers paying a bundled contract including a handset.

Customers can beat the loyalty penalty by simply switching their utility tariffs to fresh deals or moving their mortgage to a different provider.

However, while energy bills are at an all time high, it’s important to recognize that there’s no gain in switching suppliers.

However, savings can be made elsewhere and in this case the £95 monthly cost of the loyalty penalty for millions is equivalent to, on average, 17 days worth of energy use.

Making savings on your other bills, like your mobile and broadband tariffs, will help soften the blow of the energy bill hike – with the price cap predicted to hit £3,500 in October.

How do I grab the best broadband deal?

Providers will show deals for new and existing customers on their website.

It can be time consuming to check several different websites so you can save time by using a comparison website where you can compare offers based on factors such as speed, download limits and contract term.

A comparison website will also let you compare broadband deals that come with TV and phone packages.

You may be able to haggle for a cheaper broadband deal with your current provider once your current contract comes to an end.

There may be special offers for existing customers or you could be offered reduced rates if you find a new deal elsewhere and threaten to leave.

Should I follow the same method to get a cheaper mobile package?

If you’re outside the minimum term of your contract then you won’t need to pay a cancellation fee – and you might be able to find a cheaper deal elsewhere. If you’re still in your contract period, you might be charged an exit fee.

But don’t just switch contracts because the price is cheaper than what you’re currently paying.

Take a look at how many minutes and texts, as well as how much data you’re using, to find out which deal is best for you.

Use comparison websites, such as MoneySupermarket and, to compare tariffs and phone prices.

There’s also MobilePhoneChecker, which has a bill monitoring feature that recommends a tariff based on your monthly usage.

If you’re happy with your provider then it might be worth using your research to haggle a better deal.

How do I switch to a cheaper mortgage?

Check that your existing mortgage doesn’t have any exit fees if you choose to leave – check your paperwork, as some fees can be hundreds of pounds

There are also sometimes fees when you open a new product with a new lender, so make sure you can afford these charges before switching

Compare mortgage products by using comparison websites such as MoneySuperMarket and to find the cheapest deals

Work out how much your mortgage repayments are going to be on the new deal by using a mortgage calculator.

It’s worth remembering that homeowners on tracker mortgages see their interest and repayments rise immediately when the Bank of England hikes interest rates.

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Those on standard variable rates are also subject to the central banks’ actions, with many high street lenders passing on the extra costs.

Anyone with a fixed rate sees no immediate rise to payments as they have locked in the rate for a set amount of time.