How to avoid inflation on a mobile contract

Mobile networks look to tempt phone users into new contracts with tantalising offers, but while they may initially look enticing, a multi-year contract can be hit by several price increases before it ends, heavily impacted by inflation. 

This is becoming an increasing problem for mobile users, with more providers opting to set rises based above already high inflation figures. Currently, only one provider does not increase their prices mid-contract. The others use a variety of calculations, based on the Retail Price Index (RPI), the Consumer Price Index (CPI), or a flat predetermined rate. 

We’ve looked into which providers commit to price freezes, and which will be raising prices, to help you stay one step ahead.

Discover the best and worst mobile networks to see why opting for a smaller provider could net you savings, and a better service.

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Potential impact of 2023 mobile price rises

Many mobile networks have inflation-based price rises written into their contracts. Most use the December rate of CPI published in January (10.5%), plus 3.9%. O2 uses the January rate of RPI published in February (13.4%), plus 3.9%. The result is prices increasing by over 14%, adding to increases of over 10% last year. 

• *Three customers who join or upgrade from 1st November 22, existing customers have prices increased by 4.5% each April, not linked to inflation.
• **For customers who joined after November 2022, if they joined before, prices will increase by the RPI rate.
• ***In March 2023, Tesco introduced price rises for the first time on many contracts, although some can be avoided by having a Clubcard.
• ****Sky Mobile does not currently raise prices mid-contract, but offers no guarantee.

This means that O2 and Virgin mobile customers are most at risk of the highest price rises - as RPI is 13.4%, this comes to a 17.3% price increase when you factor in the additional 3.9% hike. BT Mobile, EE, Plusnet and Vodafone customers would also face steep increases of the CPI rate (10.5%) plus 3.9%, resulting in a 14.4% increase. 

With a flat rate price increase of 4.5% a year, legacy Three customers may be feeling more satisfied with their choice of provider, as their monthly repayments won't be impacted by inflation. 

These price increases are cumulative, so if you are on a two or three year contract, the 2023 increase will be added on top of the 2022 price rise. Keep this is mind when looking for a new deal, as the monthly price you are paying by the end of the contract could be significantly higher than at the start. 

Check out our guide to the best mobile phone and Sim-only deals to find your next affordable contract.

Which providers promise not to increase prices?

It’s unusual for mobile providers to commit to not increasing their prices each year. Currently, only Sky Mobile does not raise prices mid-contract for their mobile contract customers. 

However, Sky Mobile does not guarantee your price will stay the same, stating that prices may go up during your subscription. 

For years, Tesco Mobile guaranteed prices won't rise mid-contract as part of its 'Tariff Promise', but it has recently announced it will start applying inflation-based price increases to some contracts starting this spring. 

Stick to a rolling contract with a provider like Giffgaff or Smarty, however, and these types of typical inflation-based rises won't apply.

For full details on the upcoming changes for Tesco customers, read: Tesco Mobile announces price rises: here's how to avoid them, or see our Sky Mobile review to find out more about Sky's offer.

How to save money on a mobile phone contract

Thinking ahead when taking out a phone contract can obviously help future-proof you against future inflation rises. Another good option is to buy a phone outright, and get a cheap monthly Sim deal, that you can switch from as your needs change. This needn't be expensive:

• We've tested Best Buy phones for under £400, and Great Value models for under £200. Use our mobile phone reviews to find one. 
• You can also use our mobile phone contract calculator to work out the cheapest way of buying a new phone.
• Or trying shopping in the second-hand market. Our mobile phone reviews include models that are now typically only available second-hand, or read our guide to second-hand phones. 

If a contract is your preferred option, it's always a good idea to haggle with your mobile provider at the end of a contract, or switch mobile provider to a network offering a better bundle. 

Before entering a contract, you should also:

• Check the terms and conditions of your contract carefully, look out for any potential surprise costs such as mid-contract price rises or charges for roaming abroad.
• Monitor how much data you use and try not to pay for more than you need. Our research has found that the vast majority of people pay for more data that they ever use. Find out how to keep track of your mobile data.
• Find out what extras are available with different providers - this could save you money on separate subscriptions. Read our guide on mobile provider perks that can save you money.

For more cost-cutting ideas, read our guide to 10 ways to save money on your mobile phone bill.