Warning 5.7 million homes ‘struggling to pay mobile, phone and broadband bills’

Consumer group Which? said households are cutting spending on other essentials, such as food and clothing, to afford phone bills

Which? says the government should reduce VAT on telecoms bills from 20 per cent to five per cent in line with other essentials such as gas and electricity (PA)

An estimated 5.7 million UK households are struggling to pay their mobile phone, landline and broadband bills due to the cost of living crisis, a consumer group warned.

A new report from Which? says people are having to reduce spending on other essentials, and are being forced cancel or change their service or face missing payments in April.

On the back of the data, the consumer group is calling on the government to cut VAT on household telecoms bills.

Using data from the regulator Ofcom, Which? found that 3.5 million households reduced their spending on other essential items such as food and clothes in April to afford their telecom bills. This is up from an estimated 2.2 million in February – a 59 per cent increase.

Which? director of policy and advocacy Rocio Concha said: “The fact that millions of households have made sacrifices to prioritise their broadband and mobile connections during the cost-of-living crisis demonstrates just how essential these services are for day-to-day modern life.”

The soaring costs are disproportionately affecting those on the lowest incomes, with one in five – 22 per cent – lower income households reducing their spending elsewhere to afford connectivity services in April.

The figure was one in eight for middle income households – 13 per cent – which is up from 7 per cent in February.

The watchdog urged the government to reduce the amount of VAT paid on telecoms from 20 per cent to five per cent in line with other essentials such as gas and electricity.

It noted that even the most financially vulnerable consumers were charged 20 per cent VAT for social tariffs.

“To help cut bill costs, the next prime minister should reduce the VAT paid on telecoms in line with other essential services,” Ms Concha said. “Businesses must support anyone struggling to afford their bills and ensure consumers are aware of and able to access the best deals.”

Which? estimated that reducing the VAT rate on telecoms to fiverper cent would save the average household £120 per year.

A government spokesman said: “We understand that people are struggling with rising prices which is why we have acted to protect the eight million most vulnerable British families through at least £1,200 of direct payments this year with additional support for pensioners and those claiming disability benefits.

“Through our £37 billion support package, we are also saving the typical employee over £330 a year through a tax cut in July, allowing people on universal credit to keep £1,000 more of what they earn and cutting fuel duty by 5p, saving a typical family £100.”

The government has also secured “strong commitments” from telecoms companies that they will allow customers to move to cheaper packages with no additional charges or penalties, and will agree to manageable payment plans.