Are social tariffs in connectivity up to scratch?

Summary

• Currently 5.1% of eligible households in the UK are making use of connectivity social tariffs. 
• Social tariffs users tended to be initially hesitant to sign up due to concerns regarding the basic nature of the service.
•  Often due to changes in financial circumstances consumers were pushed to take the jump and switch to a social tariff. 
• Despite the initial hesitancy to sign up, social tariff users within the research were pleasantly surprised by the packages and found they met their needs of providing connectivity that is easy and simple to set up, fit for purpose, and with a stable price.

How are consumers supported in the affordability of their connectivity?

Connectivity is now a vital part of consumers' lives, with very few tasks not done in an online space. Consumers explain how they now rely on the internet for work, school, socialising and other essential tasks.  

“With my doctors now you can’t just ring up and book an appointment. They make you do it online.” 

Which? Social Tariff Research Participant [Female, Manchester]

“The core reason for using the internet on weekdays is tracking finances by checking my banking app on a daily basis to monitor money going in and out … for news and for health appointments.”

Which? Social Tariff Research Participant

Despite the importance of connectivity in consumers' daily lives, around 8 million households are struggling to afford this essential service. This causes many households to either go without connectivity or worryingly to sacrifice other essential needs to pay for this service. For some consumers connectivity offers them a crucial lifeline.

 “I wouldn't be able to live where I live without the internet. It would be too cut off, too dangerous, to be honest. There's no one within walking distance of where we live. Nobody really passes. So without the internet, I don't think it would be feasible to live where I live so that would have a huge impact on my life."

Which? Social Tariff Research Participant [Female, Wales]

Social tariffs were introduced to the UK to ensure people on low incomes could get online. The cheap broadband and mobile tariffs are available to around 4.3 million UK households currently in receipt of certain benefits, including universal credit and pension credit. Social tariffs, which are often described by providers as ‘essential’ or ‘basic’ broadband, are essentially the same as commercial packages and can act as a lifeline for many struggling households. These tariffs are offered by providers and vary in speed, cost and eligibility criteria. Figure 1 shows examples of a selection of current social tariff schemes, and helps illustrate these differences.

Figure 1: A snapshot of some of the current broadband social tariffs on offer for eligible consumers.

Methodology

To understand the attitudes and experiences of those eligible for mobile and broadband social tariffs, Which? worked with a specialist agency, 2CV, to conduct a deliberative and co-design qualitative study. We conducted a series of focus groups with 54 consumers, all eligible for social tariffs. Participants were recruited to ensure a mix of gender, age, ethnicity and household structure. The sample included social tariff users and non-users, as well as those who were aware and unaware of this scheme.

This article explores what drove those who are currently using social tariffs in the research to sign up and what their experiences have been of the scheme so far.

Who is currently using connectivity social tariffs?

Currently across the UK 5.1% of all consumers eligible for social tariffs have chosen to switch. Within the research a quarter of the sample were currently on a social tariff, and most explained how they had an initial hesitancy towards signing up to a broadband or mobile social tariff. This was often due to concerns that essential or basic packages mean the reduced price of connectivity would come at a cost to the quality of service. One tariff user explained how there were concerns regarding the speeds on offer.

"So I've just assumed it was like a slower speed type of thing and that's why it's cheaper."

Which? Social Tariff Research Participant [Female, Manchester]

Despite the pessimism, consumers were often prompted to sign-up to one of these tariffs as a result of a change in financial circumstances, such as having to reduce working hours, as explained by one participant. 

"I didn't even know what a social tariff was until a couple of months ago. Since I stopped working and decided to go to Uni, we've been on Universal Credits… As soon as we got put back on universal credit, Virgin changed us to a social tariff, but they called it Virgin Essential. Yes, it's something like 19 pounds a month. It's ridiculously cheap."

Which? Social Tariff Research Participant [Male, Wales]

One participant explained how she looked into the scheme because of someone in a mobile shop suggesting she should give it a try. 

“The reason I switched to Vodafone Social Tariff- and I was really sceptical - was because I was in the shop picking up a phone and there was this really nerdy kid that was working the shop... He basically was like, ‘what are you using [ your broadband] for? Ah you're with Virgin. Oh, you don't need that fast. Trust me, I game and my brother's doing the same at the same time. And we've got a Vodafone, it's fine and it's cheaper.’ I trusted him because he was a geek.”

Which? Social Tariff Research Participant [Female, London]

What are consumers’ experiences with social tariffs?

We know for many social tariff users there was an initial hesitancy to sign up and, for many, their circumstances forced them to switch to a social tariff. Within the current research we asked social tariff users about their experience of these packages. Overall users of social tariffs were pleasantly surprised with the service provided by the packages. One user explained how pleased they were with the tariff and how quickly it became normal.

"I was very chuffed when obviously any reduction in a bill is a good feeling and it's nice to have that. And I was quite chuffed and then obviously quite quickly you kind of forget about it."

Which? Social Tariff Research Participant [Female Wales]

Another described how a cheaper tariff didn’t mean they have to go without or receive a substandard service. 

"A reduction in charges, but not necessarily a reduction in service." 

Which? Social Tariff Research Participant [Male, Wales]

This satisfaction tends to be due to social tariffs meeting the connectivity needs of those using them. This includes providing connectivity that is easy and simple to set up, fit for purpose, and with a stable price. These factors are significant to eligible consumers, as they are the criteria they use to determine if a social tariff is suitable for their needs. We explore each of these needs below.

1. Ease - This is important for many eligible consumers when choosing a tariff, and this applies to social tariffs too. Although most were not informed by their providers about social tariffs and had to rely on their own research to find the package that best suited their needs, they appreciated the familiarity of the structure of social tariffs. This recognition of the tariff structure’s simplicity made it easier for consumers to make informed choices, and they found comfort in their user-friendly approach when navigating their connectivity options.They explained how the enrolment process was easy and the familiarity of packages created peace of mind. One user explained how this familiarity made them feel included and normal, removing potential stigma e.g. this support isn't for me.

“I like the fact it’s inclusive. They’re trying to not make people feel left out, like just because you don’t earn enough you don’t get to use [a certain provider]. It’s not discriminatory like this.”    

Which? Social Tariff Research Participant [Female, London]

Social tariff users also had really positive experiences with the customer service, which was often a surprise for many.

 “There was no awkwardness or embarrassment about having to ask about a social tariff and things they were very good.

Which? Social Tariff Research Participant [Female, Wales]

2. Stable price - The second need identified is a tariff which is at a stable price. Due to the financial circumstances of eligible consumers, price stability is key as many lack a financial buffer. Currently social tariffs are exempt from mid-contract price rises and therefore prices will not increase during the contract period. In light of this, users of social tariffs, explained how the promise of no in-contract price rises offered them security and peace of mind. One participant explained how this price security allowed them to plan financially, which, given the current cost of living crisis, is vital for those most in need. 

“Having a stable contract for two years provides stability and allows for better financial planning."

Which? Social Tariff Research Participant [Female, Wales]

3. Fit for purpose - Finally consumers need a package which is fit for purpose. Concerns regarding this need not being met often causes initial hesitation for those eligible to social tariffs. Both this and past research have shown often consumers preconceptions regarding the speed, reliability and coverage at times put eligible consumers off taking-up social tariffs, particularly users who lived more rurally. Despite this hesitation, all were pleasantly surprised with the service provided by their social tariff, with many consumers within the discussions suggesting they are just as good as previous commercial tariffs.  

“ For me, the social tariff is the best. It’s nice, simple, easy, I know what I’m getting, I know how much it costs. It’s done and it’s dusted and it’s simple.”    

Which? Social Tariff Research Participant [Female, Wales]

"For me, it was purely about saving money. To be honest, nothing has changed in terms of the reliability of the actual service I'm receiving. It is just that my package itself has gotten slightly cheaper." 

Which? Social Tariff Research Participant [Male, Wales]

The findings of the research show that groups of eligible consumers who have taken the jump and moved to a social tariff, despite their initial hesitations, are surprisingly happy with their decision. They report it aligns with the three needs of ease, stable price and fit for purpose.  

Conclusion

The research illustrates how happy and content those on broadband and mobile social tariffs are with their connectivity package. Users frequently explain how the packages, despite being advertised as essential and basic, go above and beyond meeting their connectivity needs. This suggests once eligible customers are on a social tariff, connectivity providers on the whole are doing a good job of supplying these cheaper tariffs which are fit for purpose for many of those eligible for affordability support. 

Regardless of this success, we know it isn’t always easy to get eligible consumers to try social tariffs. This is due to many already having preconceptions about social tariffs and their ability to meet their connectivity needs, or rather inability to meet these needs. We even found this within the group of social tariff users within the research. For most, they were forced into making the move due to a change in circumstances, for example increased financial constraints. Without this pressure, most wouldn’t have switched to a social tariff because of their concerns regarding speed, reliability, coverage and quality of service.

 However, the research has shown that once the decision is made to switch to a social tariff, consumers find the packages do meet their need for a connectivity which is easy and simple to set up, fit for purpose, and with a stable price - overriding any misconceptions. Therefore there is a need for work to be done to highlight the benefits of social tariffs and help people understand how they compare to their current package. This could alleviate some of the concerns and worries eligible consumers have in regards to social tariffs. 

Despite this, it is likely that this intervention will not go far enough and there will likely be a need for further action alongside this. As highlighted within the research, not all eligible consumers believe social tariffs are support that is ‘for them’. It is likely that the use of government data to make identification of eligible customers easier would be beneficial, removing the onus on the consumer. However further work and changes to the social tariff would need to be considered alongside such a change. 

The research has shown that the current social tariff delivers for those consumers who choose to take it up. So, highlighting the benefits of these packages could improve the current take up, but only to a point. In their current form connectivity social tariffs aren’t a long term solution. In part, this is due to the fact that widespread take up of social tariffs, using the current funding model, would be unsustainable for providers. It is also clear that the current model is not successfully delivering these connections to a high proportion of those who are eligible. There needs to be a long term solution which balances the needs of the consumer with the needs of businesses.