RPI, CPI & inflation: phone mid-contract price rises explained

You may think the pricing of phone contracts appears straightforward: what you see is exactly what you pay, for the entire duration of your contract.

Unfortunately, it’s not so simple - at least with most networks.

In recent years, the majority of networks have modified the terms and conditions in their phone contracts, stating that the monthly price you pay can increase once a year, in line with inflation (either RPI or CPI - more on this later), plus an additional fixed percentage set by the provider.

These price increases occur usually on 31 March / 1 April, even if you haven’t upgraded, changed or renewed your phone contract.

Phone and SIM only contracts are equally affected by mid-contract price rises. However, 30 day / 1 month SIM only tariffs aren’t affected, as they technically aren’t contracts.

Most networks have moved to CPI (Consumer Prices Index) to determine price increases. CPI measures inflation by calculating the total amount for a set basket of goods and services, and comparing the difference to the total amount for the previous year.

RPI (Retail Price Index) is similar, except it also includes mortgage interest payment rates. RPI is nearly always higher than CPI, meaning your mid-contract price rises will go up more with networks which prefer to use RPI.

How do mid-contract price raises work?

The majority of UK networks have mid-contract price rises in line with inflation, and use either RPI (Retail Price Index) or CPI (Consumer Prices Index) to determine the rate.

Some also add a network rate on top, which is typically 3.9%. The network rate, also known as a premium rate, is not affected by or calculated using inflation. Networks use their own metrics to set the premium rate - it just so happens they’ve all decided on 3.9% at the moment. Unlike RPI/CPI, the network rate is fixed for the duration of your contract.

You may not be affected by mid-contract price rises if you’re on an older legacy contract, and you haven’t upgraded or renewed since - we’ll explain the details and dates for each network further down.

For networks which increase prices mid-contract in line with inflation, the monthly amount you pay will increase once a year, usually on 31 March / 1 April.

The RPI and CPI rates used to determine the increases will be taken from a particular month, which is different for each network. Some networks use the previous December rates, and some use January of the current year.

Let’s take a look at the following example, for an iPhone 14 contract with EE taken out on 19 October 2022:

• Upfront cost: £0
• Monthly cost: £47
• Contract length: 36 months

Price rises will occur on the next increase date, which is 31 March 2023.

EE uses the CPI rate from the previous December, which is currently from December 2022, and is 10.5%. They also add their own rate on top, which is 3.9%. This means the total price increase will be 14.4%.

Therefore, from 31 March 2023, your monthly bill will increase by 14.4%, from £47 to £53.77.

Since this is a 36 month contract, the following increase after 31 March 2023 will occur on 31 March 2024.

Of course, we don’t know what the CPI rates will be in the future, so we can’t calculate what the monthly bill will be from 31 March 2024.

However, it will accumulate - meaning it will use the 31 March 2023 price increase (£53.77) as the new baseline. This continues to accumulate every year.

Which networks have mid-contract price rises?

Price increases will only happen once a year (31 March / 1 April). CPI / RPI rates will be taken from a particular month, which is decided by each network. For example, EE uses rates from December of the previous year, and Three uses rates from January of the current year.

The following networks have mid-contract price rises. The rates shown are due to come in effect for 2023 on 31 March / 1 April.

CPI + network rate:

• BT - 14.4%: 10.5% (CPI December 2022) + 3.9% (network rate)
• EE - 14.4%: 10.5% (CPI December 2022) + 3.9% (network rate)
• iD Mobile - 14%: 10.1% (CPI January 2023) + 3.9% (network rate)
• TalkMobile - 14%: 10.1% (CPI January 2023) + 3.9% (network rate)
• Tesco Mobile* - 14.4%: 10.5% (CPI December 2022) + 3.9% (network rate)
• Three - 14.4%: 10.5% (CPI December 2022) + 3.9% (network rate)
• Vodafone - 14.4%: 10.5% (CPI December 2022) + 3.9% (network rate)

RPI + network rate:

• O2 - 17.3%: 13.4% (RPI January 2023) + 3.9% (network rate)
• Virgin Mobile - 17.3%: 13.4% (RPI January 2023) + 3.9% (network rate)

* Tesco Mobile price increases are complicated. They may not start until 2024, and may not occur at all depending on when you joined or whether you're on a Clubcard Price plan. See our dedicated section below on Tesco Mobile mid-contract price increases.

BT price increases

BT’s next price rise will occur on 31 March 2023, and will be 14.4%.

BT have uses December 2022’s CPI rate, which is 10.5%. They also add their own network premium, which is 3.9%.

Price rises will affect all BT Mobile contracts. However, if your contract started before 1 September 2020, you have the right to cancel your contract without paying an early termination fee or penalty.

Out of plans charges and add-ons will also be affected by the same price increase of 14.4%.

EE price increases

The next price increase for EE will occur on 31 March 2023, and will be a total of 14.4%.

EE uses the December 2022 CPI rate, which is 10.5%. They also add their own premium on top, which is 3.9%.

EE claims the average customer will see their monthly bill increase by £1 per week, or £4 per month.

EE previously used RPI instead of CPI for contracts taken out before 1 September 2020. However, from 31 March 2023, all customers will be moved to a CPI rate, which is nearly always lower than RPI.

Out of plans charges and add-ons will also be affected by the same price increase of 14.4%.

Tesco Mobile price increases

If your Tesco Mobile contract started on or after 27 March 2023, mid-contract price rises will start on 1 April 2024, and will occur yearly from this date onwards. This also applies to contract renewals on or after this date (27 March 2023). The increase rate will be the previous December CPI rate plus a 3.9% premium. However, if you’re on a Clubcard Price plan, you won’t have any contract price rises.

If your Tesco Mobile contract started before 27 March 2023, you won’t see any mid-contract price rises. However, after your contract ends, annual price rises will occur on 1 April, currently at 14.4% - using the previous December CPI rate (currently 10.5%) plus a 3.9% premium. You can avoid the price rises by upgrading to a Clubcard Price plan.

For Tesco Mobile contracts which expired between 1 February 2023 and 31 January 2024, price rises will occur annually starting 1 April 2024. The increase rate will be the previous December CPI rate plus a 3.9% premium. However, you can avoid price rises by upgrading to a Clubcard Price plan.

If your Tesco Mobile contract expired before 1 February 2023, price rises will occur annually, starting 1 April 2023 at 14.4% - the previous December CPI rate (currently 10.5%) plus a premium (3.9%). However, price rises can be avoided by upgrading to a Clubcard Price plan.

An important note about Clubcard Price plans: they are exclusive plans for Clubcard card holders. However, not all plans are Clubcard Price plans, meaning if you sign up to a non-Clubcard Price plan, you will still see mid-contract price rises, even if you have a Clubcard.

Talkmobile price increases

Talkmobile will use January’s CPI rate of 10.1%. Talkmobile also add a network premium of 3.9% on top of the CPI rate, resulting in a total increase of 14%.

Price increases will occur on 1 April, and will also affect out of plan charges and add-ons.

Three price increases

Three customers who joined or upgraded after 1 November 2022 will see their prices increase by 14.4% on 1 April 2023.

This is the total of December 2022’s CPI rate (10.5%) and a network premium (3.9%).

Contracts taken out between 29 October 2020 and 31 October 2022 will see a fixed increase rate of 4.5% on 1 April 2023.

For contracts started between 29 May 2015 and 28 October 2020, price increases will occur on 1 May 2023 at January’s RPI rate.

Price increases do not affect out of plan charges or add-ons.

Vodafone price increases

For Vodafone customers who joined or upgraded after 9 December 2020, your monthly bill will increase by 14.4% on 1 April 2023. This is the total of December 2022’s CPI rate (10.5%) and a network premium (3.9%).

If you have a Vodafone EVO plan, the price increase will only be applied to the Airtime Plan, and won’t be applied to your phone or smartwatch monthly bill.

If your contract started after 11 August 2021, out of bundle charges will also be affected by the same price increase.

For contracts taken out before 9 December 2020, your monthly bill will increase on 1 April 2023 with the March 2023 RPI rate.

O2 price increases

If you joined or upgraded with O2 on or after 25 March 2021, your Airtime plan will increase with January 2023’s RPI rate of 13.4% and a network premium of 3.9%, for a total of 17.3%. The price increase will occur on 1 April 2023.

For contracts started before 25 March 2021, you will still see an increase with January 2023’s RPI rate, however there will be no network premium on top.

Regardless of when you joined O2, if you’re on an O2 Refresh contract, only your Airtime Plan will be affected by price increases. Your Device Plan will not be affected, as it’s on a separate credit agreement.

Virgin Mobile price increases

Virgin Mobile customers will see their phone contracts increase on 1 April 2023, using January 2023’s RPI rate of 13.4% and a network premium of 3.9%, for a total increase of 17.3%.

Please note, Virgin Media’s price increases for their phone contracts are very different compared to their broadband, TV and landline contracts.

iD Mobile prices increases

For iD Mobile customers who joined or upgraded after 1 November 2022, your phone contract price will increase on 1 April 2023, using January 2023’s CPI rate of 10.1% and a network premium of 3.9%, for a total 14% price increase.

If you joined or upgraded between 1 March 2020 and 31 October 2022, your phone contract price increase will only be January’s RPI rate, without a premium on top.

If you joined before 1 March 2020 and you haven’t upgraded since, you won’t be affected by price increases.

Which networks do not have mid-contract price rises?

Currently, only one major network do not have mid-contract price rises:

• Sky Mobile

In addition, 30 day / 1 month SIM only plans are not technically contracts, therefore they won’t be affected by price rises, even if they’re on a network which has price rises for their phone contracts.

As the following networks mainly sell 30 day / 1 month SIM only plans, they don’t have mid-price rises for any of their plans:

• Asda Mobile
• FreedomPop
• giffgaff
• Lebara
• Lycamobile
• Plusnet
• SMARTY
• VOXI

What’s RPI and CPI, and what’s the difference between the two?

CPI (Consumer Price Index) and RPI (Retail Price Index) are common methods to determine the rate of inflation. In a developed economy, such as the UK, these rates should steadily increase every year, and almost never decrease.

These rates are published every month for the previous month, by the Office for National Statistics.

CPI determines the inflation rate by totalling the cost for a set basket of common goods and services, and comparing it to the total cost of the previous year. The difference, whether it be an increase or decrease, is used to calculate the percentage rate.

RPI (Retail Price Index) is almost identical, except it also includes mortgage interest payments. Therefore, RPI is heavily affected by the state of the housing market.

RPI is consistently higher than CPI in almost every year on record. As a result, O2 and Virgin Mobile have the highest mid-contract price increases, as they use the RPI rate (13.4%) plus a network rate (3.9%), which totals a huge 17.3% increase for customers this year. iD Mobile also uses RPI (13.4%) plus a network rate (3.9%), for the same price increase.

In recent months, RPI and CPI have seen some of the highest rates on record, mainly due to the war in Ukraine and an increase in oil prices. The lasting effects of the Covid-19 pandemic have also had an impact, as well as talks of a looming recession.

What if I can’t afford to pay the new price rise?

If you can’t afford to pay the new monthly bill after a price increase, don’t panic.

Contact your network directly and explain your situation. Most will be willing to help, such as setting up a special payment plan that allows you to spread the cost over a longer period - however, this isn’t always guaranteed. Most networks will be willing to do something in order to make it easier for you to pay the new price increase.

The absolute worst thing you can do is stop paying. This will put you in debt, will negatively affect your credit score and may also see your debt passed onto a debt collector.

If you believe a new price increase is unfair because it wasn’t stated clearly in the terms and conditions of your contract, you may have a case to cancel your contract early, within 30 days of your network notifying you of the price increase. For more information, see our guide on cancelling your phone contract early.

Also remember that once your contract is up, you are free to switch plans or change networks. You’ll often be able to find an even cheaper phone contract compared to your current one.

What happens if a network increases prices mid-contract, even if it wasn’t stated in the terms and conditions?

If a network increases your monthly bill mid-contract and it wasn’t stated in the terms of your contract, or they increase it by an amount more than specified, you will most likely be able to cancel your contract early.

If this is the case, in line with Ofcom rules and regulations, you have 30 days to cancel your contract and leave early, without paying a termination fee or penalty.

You also have the right to cancel if the network specifies their own rate that isn't based on a commonly used inflation rate, and is higher than CPI and RPI. For example, Three used to have a fixed rate of 4.5% for their price increases. If this was higher than RPI or CPI in a particular year, customers had the right to cancel within 30 days of being notified of the price increase.

However, most networks do state in the terms of phone contracts that they can increase your monthly bill in line with inflation (either RPI or CPI) and with a network premium on top (usually 3.9%). In such a situation, they are within their legal right to increase prices, and there’s little you can do.

Therefore, it’s important to read and understand the terms and conditions clearly whenever taking out a new phone contract. This will help you to avoid unexpected price increases.

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