Consumer watchdog Which? has called on the government to reduce VAT on telecoms services after claiming nearly six million households are struggling to pay their bills due to the rising cost of living.
Its analysis of Ofcom data found that 5.7 million households, or a fifth of all homes in the UK, experienced at least one affordability issue during April 2022. Meanwhile the number of households that experience multiple affordability issues increased by 56% from February 2022.
An affordability issue might mean missing a payment, changing service, or having to cut back on other essentials.
Broadband affordability
As many as 3.5 million households reduced spending on items such as food and clothes in order to pay their bills and this trend impacted both those on middle and lower incomes – the most common impact of the current crisis.
Which? says the fact that many people were willing to cut back on other areas rather than lose their broadband or mobile connection highlights the fact that connectivity is now essential to everyday life and that taxation should reflect that.
It wants the next Prime Minister to reduce the amount of VAT spent on telecoms from 5% to 20%, in line with other utilities like gas and electricity, a move that could save households an average of £120 a year.
“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,” said Rocio Concha, Which? Director of Policy and Advocacy.
“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.”
Which? has also echoed calls for broadband providers to make customers aware of their best value deals and any social tariffs they might be eligible for. Several providers now offer such tariffs, usually available to anyone in receipt of universal credit.
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