As if people aren’t paying enough for their mobile phone contracts already. Four of the largest network operators have announced that they will raising prices over the next few months. Millions of people will be affected with the price hikes, as operators rise prices in line with inflation. Not only will this affect anyone who takes out a new contract, but the rises will also apply to people with existing contracts.

EE was the first network to confirm that it will raise prices. EE customers will see their bills rise by just over 4% as of 30^th March, 2018. This might not seem a lot, but on a £19.99 per month contract this will add a further £1.22. This is almost £15 over the course of a year. For someone with an expensive smartphone could be paying as much as £60 extra over the next 12 months. EE have defended the rise. They say that people on their most popular price plan will be paying just 85p per month more than before.

O2 will be following suit as of 1^st April. They announced on Monday that they will be rising prices by 4%. Three have also confirmed that a price hike is imminent. They have not yet advised how much or when this will occur from.

Vodafone have informed us that anyone who took out a contract after 4^th May, 2016 will have their contracts adjusted. This is so that they are in line with the latest Retail Price Index (RPI) figures.

All Above Board

Despite the fact that the rise is only inline with the latest inflation figures, many people will be upset about the fact that the network operators are rising prices in the middle of existing contracts. However, there is a clause in the small print of virtually all mobile phone contracts. This clause allows the operator to raise the monthly charge in line with the retail price index.

This is something that we are all told aabout either verbally or in writing when we take out our contracts. However many people just simply ignore it. Nevertheless, it is still very frustrating when prices rise and you’re stuck in the middle of a contract. Sometimes contracts can be 24 months or even longer. The only way to get out of such a contract is to cancel it, but the penalties of cancelling a mobile phone contract are usually severe Typically, the penalty can be 100% of what you would have paid over the term of the contract. Therefore, it often makes sense to keep the contract for it’s duration as you’ll be paying the same anyway.

Fortunately, there is one way of getting out of a mobile phone contract without having to pay the huge cancellation charges. If prices increase by more than the retail price index, and the rises are not due to changes in tax or VAT, then you are entitled to cancel your contract without incurring a penalty fee.

It’s price rises such as this that show the value of Pay As You Go (PAYG) and sim-only deals. Because they are equivalent to contract free, it means that if the prices rise you can simply choose to cancel. This is immediate and will incurr no extra penalties.