Virgin Media joining the gang and will start increasing prices in mid-contract
As a Virgin Media customer for many years, I have always appreciated the fixed price guarantee that I get when I sign a contract. There are no hidden fees or price increases, and I can be confident that my monthly bill will stay the same for the entire contract term. In the month before my contract ends, I will be able to negotiate a new contract or switch to a different provider if I find a better deal.
Unfortunately, Virgin Media has decided to join the trend of other companies and raise their prices. They have notified their customers that their pricing terms will be changing.
As explained by them, price increases are being attributed to rising inflation, which is currently at a 40-year high in the UK.
In the past, if Virgin Media decided to change prices mid-contract, they were required to inform their customers and give them the option to terminate the contract without penalty if they did not agree to the price increase.
The email received is your final opportunity to end your contract with Virgin Media without incurring an early termination fee.
If you are on a new contract with Virgin Media, or if your contract is halfway, you will need to decide by the end of October 2023 whether to accept the new terms or to terminate your contract without penalty.
If you do not accept the new terms, you must give Virgin Media 30 days’ notice in writing of your intention to terminate your contract. If you do nothing, your new terms will be accepted automatically.
If you accept the new terms, Virgin Media will increase the price of your contract by the Retail Price Index (RPI) rate of inflation plus an additional 3.9% each April. Based on the current RPI figures, this would be an increase of 13.8% each April.
Virgin Media uses RPI+3.9% for their price increases, while other providers typically use CPI (Consumer Price Index). RPI is generally higher than CPI, so Virgin Media’s price increases will be more expensive for customers.
Virgin Media contracts are typically for 18 months, so your price will go up at least once during the contract. If you sign your contract between October and March, your price may go up twice during the contract.
If you pay £27 for 250Mbps broadband, like me, and that’s a good deal with them, then your price would rise to £30.78 in April 2024, based on the current RPI rate of inflation.
My contract is due to expire in mid-January 2024. This means that I will be facing a double price hike if I do not negotiate a better deal.
In that case, I will need to negotiate the price carefully.
If I am able to negotiate the same price of £27 per month, my monthly bill will increase to £30.78 in April 2024 and to £34.20 in April 2025.
Currently, on the market, only Hyperoptic has not opted into mid-contract price increases. However, their service availability is limited, and they will need to invest in infrastructure to make it available to more customers. This will cost them money, so I will not be surprised if they eventually opt into the same rules as other players on the market.
A price increase announcement is never welcome, but don’t make any rash decisions. Do some research first and compare what other providers are offering. If you find a good deal, assume that the price you are quoted now will increase (twice) by 14% each time. Do your calculations quickly to see if it would be better to stick with what you have now.
Remember to use good comparison sites like Uswitch or MoneySuperMarket to see what’s available to you. You may also want to consider Vodafone, which recently teamed up with CityFibre and can offer you a synchronous connection (like 100 Mbps download and 100 Mbps upload), which is not offered by most other providers.
If you have recently started a contract with Virgin Media or will still be in contract through April 2024 and will be affected by a price hike, it is always worth calling them before you decide to leave to ask if they will waive the price increase or offer you some sort of discount. However, remember that they are under no obligation to do this, so be polite and respectful when you communicate with them, as they are giving you an option and not forcing you to stay.
Remember that you have until the end of October 2023 to let Virgin Media know if you want to accept the new terms or terminate your contract. If your contract expires before April 2024, like mine, you do not need to do anything. However, keep in mind that prices will increase in April 2024, so make sure to get a good price (discount) when you sign a new contract to compensate for future price hikes.
