Talk's not so cheap as phone bills rise again

MILLIONS of households will see their phone bills rise next month as BT and TalkTalk hike their rates for both line rental and calls. For some customers this will be the second price increase this year.

From 1 October, BT customers who don't pay upfront for a 12-month contract will see their call charges and connection costs rocket by 10 per cent, while call set-up fees will jump to 10.9p and daytime call rates to 6.4p per minute. Line rental will rise 50p to 13.29 for customers receiving paper bills or 12.04 for those receiving them electronically.

BT's pay-upfront option is called Line Rental Saver. At 113.88 a year it works out to 9.49 a month and also includes weekend calls.

BT customers have already seen "peak" hours extended this year. From 1 April, peak calling rates were charged from 7am to 7pm as opposed to 6am to 6pm previously.

Also from Friday, TalkTalk customers will see daytime call rates climb to 6.4p as well as a rise in line rental to 12.04 a month and call set-up fees to 10.9p. Customers that don't pay their bills on time will see the late payment charge jump from 7.50 to 10. Home-movers will see the fee to take their TalkTalk service with them to their new home jump from 29.99 to 49.99.

Ernest Doku, communications expert at uSwitch.com, says: "In a year of pay freezes and spending cuts customers will find these increases particularly hard to take. Already this year consumers have been slapped with two rounds of price rises from BT and TalkTalk, on top of a shift in off-peak hours from 6pm to 7pm and an imminent VAT increase that will inevitably push bills up further come January.

"BT customers have the opportunity to reduce their line rental costs if they are able to pay for 12 months upfront - unfortunately, some won't have this kind of money spare."

The good news is that consumers can save money on their phone bills by either switching supplier or signing up for a call package. According to uSwitch, there is a price difference of more than 170 a year between the cheapest and most expensive home phone plans - so there are plenty of savings to be made.

The cheapest monthly line rental in the UK is Primus Home Saver, which costs 8.99 a month through homephonechoices.co.uk with inclusive evening and weekend calls. This will cost customers a total of 107.88 a year.

You can get even cheaper line rental if you're prepared to pay a year's line rental upfront. Primus' Saver Plus package involves paying 99 in advance, which works out to 8.25 a month. Weekend calls are free, daytime calls 5p a minute and evening calls 3p a minute.

Virgin Media's Talk Unlimited Plan is the most expensive call package: line rental costs 11.99 a month, the call package 7.95 and there is also a connection charge of 40, bringing the first-year total to 279.28.

Michael Phillips, product director at Homephonechoices.co.uk, says another money-saving option is to consider bundling home phone services with digital TV and broadband. Buying a bundle, he says, could save households around 200 a year.

"The home phone bill is often the ‘forgotten' bill - but, just like insurance and financial products, large savings are possible if you shop around," says Phillips, "It is incredibly easy to switch nowadays and the best deals are to be found online. So ensure you use a reliable Ofcom-accredited price comparison site to compare packages available in your area. This is particularly important if you are in an area where choice is limited due to a lack of competition."

The upside of bundling is that it saves you time, money and the hassle of managing several suppliers at once. You'll have one contract and one bill for all your services. However, if the supplier has service or technical problems all your services could be affected.

When switching to a bundle you need to make sure you are not tied into a contract with any existing supplier for any product within the bundle. If you have contracts of differing lengths, switching can be tricky and you will need to wait for all your existing contracts to end to switch.

As well as switching suppliers, switching packages and signing up for a bundle, there are a number of other ways to bring down your phone bill.

Firstly, pay by direct debit. Nearly all providers discourage payment by any means other than direct debit and impose punitive charges of anything up to 5 per month for dealing with cheques.

Next, sign up for paper-free billing. Some providers offer useful savings if you receive your statements online, not by post. You'll also be doing your bit for the environment.

Make sure you check the small print. If you're tied to a 12 or 18-month contract, you may be faced with exit fees if you want to switch before the contract term ends. Weigh up the savings and charges as you may find the savings don't merit the switch.

Finally, be aware of the costs of calling mobile phones. This can vary hugely between providers and be very expensive. Most pay-monthly mobile phone deals include a certain amount of inclusive call minutes so consider using your mobile to call other mobiles rather than your home phone - it will work out much cheaper.