RPI increase announce VMO2

neilied

And so it starts. Just had the email for annual increase. VM-O2 state a 7.5% increase from April. Thankfully I recontracted in January although any monthly saving over the old price will now be lessened. Surely regulators should now step up and enforce set contracted prices. It seems that now there are contracts of more than 12 months the need for this mid term hike because necessary. Just estimate the term and set the price. 

Neil_Jones

neilied said:

And so it starts. Just had the email for annual increase. VM-O2 state a 7.5% increase from April. Thankfully I recontracted in January although any monthly saving over the old price will now be lessened. Surely regulators should now step up and enforce set contracted prices. It seems that now there are contracts of more than 12 months the need for this mid term hike because necessary. Just estimate the term and set the price. 

https://www.ofcom.org.uk/phones-and-broadband/bills-and-charges/review-of-inflation-linked-telecoms-price-rises - "Providers may increase their prices during the contract period and the new rules do not restrict their ability to set the level of their prices. However, they will prohibit providers from including inflation-linked, or percentage-based, price rise terms that apply to the Core Subscription Price in new contracts. This will give consumers clarity and certainty about the price they will pay, helping them choose the best deal for their needs."

neilied

Neil_Jones said:

neilied said:

And so it starts. Just had the email for annual increase. VM-O2 state a 7.5% increase from April. Thankfully I recontracted in January although any monthly saving over the old price will now be lessened. Surely regulators should now step up and enforce set contracted prices. It seems that now there are contracts of more than 12 months the need for this mid term hike because necessary. Just estimate the term and set the price. 

https://www.ofcom.org.uk/phones-and-broadband/bills-and-charges/review-of-inflation-linked-telecoms-price-rises - "Providers may increase their prices during the contract period and the new rules do not restrict their ability to set the level of their prices. However, they will prohibit providers from including inflation-linked, or percentage-based, price rise terms that apply to the Core Subscription Price in new contracts. This will give consumers clarity and certainty about the price they will pay, helping them choose the best deal for their needs."

Wasn’t aware it included broadband as well as mobiles. So is this rpi % increase for broadband services legal?

neilied

Link says for new contracts from 17/1/25. Shame as I recontracted a week earlier than that. I guess they are going to reap the benefits of this whilst they can.

Neil_Jones

neilied said:

Neil_Jones said:

neilied said:

And so it starts. Just had the email for annual increase. VM-O2 state a 7.5% increase from April. Thankfully I recontracted in January although any monthly saving over the old price will now be lessened. Surely regulators should now step up and enforce set contracted prices. It seems that now there are contracts of more than 12 months the need for this mid term hike because necessary. Just estimate the term and set the price. 

https://www.ofcom.org.uk/phones-and-broadband/bills-and-charges/review-of-inflation-linked-telecoms-price-rises - "Providers may increase their prices during the contract period and the new rules do not restrict their ability to set the level of their prices. However, they will prohibit providers from including inflation-linked, or percentage-based, price rise terms that apply to the Core Subscription Price in new contracts. This will give consumers clarity and certainty about the price they will pay, helping them choose the best deal for their needs."

Wasn’t aware it included broadband as well as mobiles. So is this rpi % increase for broadband services legal?

I've already answered this when I quoted from Ofcom in  my previous reply.

neilied said:

Link says for new contracts from 17/1/25. Shame as I recontracted a week earlier than that. I guess they are going to reap the benefits of this whilst they can.

Providers exist that do not include mid price rises.  You are free to move to one of them.

neilied

Your right there are. And I am happy with mine. But I do think these rises should be incorporated into a set contract price. But as you say vote with your feet is a choice. Similar conversation had today regarding minimum wage. As a business owner the upcoming increase is passed directly on to the customer. £1 on every meal price and 25p on every pint. I then pointed out that this would be done throughout and cost of living will increase, so staff will be no better off. But this cycle continues and everything increases. The only winner in this is the government as they charge a tax percentage. Income tax, VAT. They are win win

Bigphil1474

Not sure I agree with that. If you sign up for am 18month contract, the suppliers costs are bound to go up during that 18 month. If they charged you more for the 18 month contract upfront, you might be worse off than having the April increase mid contract (which is indexed linked). We will lose either way, so the fixed increase at least gives you knowledge of what that will be rather than an unknown % at the start. As above, some suppliers will fix the contract cost, but check competitiveness.

The minimum wage is a different matter. Apart from the moral obligation of paying your staff a decent wage, a £0.77p an hour increase in wages does not add up to an extra £1 on every meal and 25p on every pint. You may choose to make up that added cost of course, but most staff will produce and/or serve more than 1 meal and 1 pint in each hour. The extra cost would probably be closer to 10p and 1p at the very most. The cost of your meals doesn't make your staff worse off, as presumably they'd choose to eat elsewhere if they cost too much. 

The government doesn't 'win'. It collects taxes to spend on public services. If you aren't happy with the government vote for a different one.

neilied

If only it was that simple with £0.77. That increase added to a labour percentage around 25% using the new rates calculate your labour spend in £ to forecast labour spend. Then what uptake in sales GP is required to bring the labour spend in on % target. Most pubs, restaurants operate on a food GP of 80% and wet around 40% and still only get ebitda % of between 5 and 10%. So the price increase isn’t as simple as that

neilied

When you go to a pub at £4 a pint and £20 a meal. Be mindful that this annual increase may have a feel good factor but doesn’t make most better off. I stopped managing a hospitality business 8 years ago. A managers salary was £28k, head chef about the same. Asst manage/Sous chef £24k all these are now under minimum wage which means a 48 hour commis or waiter on standard 48hour week earns £30k my then head chef is still in the company but as the lowest skill level increases so does the hierarchy incrementally? He now earns £60k manager £55k sous chef £40k and so on. Food costs have increased by around 30% so selling prices increase.