Money saving expert Martin Lewis has claimed that new Ofcom rules on mid-contract price hikes for mobile and broadband have backfired, forcing more consumers to pay higher rates than before.

The regulator brought in its ‘pounds and pence’ transparency rules at the start of the year, aiming to improve transparency from broadband and mobile providers by forcing them to tell customers exactly how much they can expect their payments to rise mid-contract.

The new rules did not introduce a limit on how much providers could increase tariffs by mid-contract.

Three out of four consumers are now worse off as a result, analysis by Mr Lewis’ Money Saving Expert team has revealed. Looking at 47,000 tariffs, the group found that most people are still facing above-inflation mid-contract price hikes, with the majority being even higher than before the new rules came into enforcement.

Mr Lewis said: “This was frustratingly predictable.

“Let's be plain, it provisionally looks like the regulator’s intervention resulted in most contracts costing more. Transparency only goes so far; we don’t want customers overpaying just because they were told about it first. The solution has always been bleedin’ obvious. Just ban above-inflation mid-contract price hikes.”

The research highlights a ‘poverty premium’, where those on the best value contracts are now facing the highest mid-contract rises, unlike before where almost all customers would see the same inflation-linked rise.

Those on cheaper 1 to 5GB mobile contracts are now facing a 23 per cent mid-contract rise on average, up from 7.3 per cent for all customers before the rules were introduced.

For medium 25GB contracts, the rise is 10 per cent on average, while unlimited data customers – on the most expensive contracts – are the only ones who have stood to gain, at an average seven per cent mid-contract rise.

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To see any financial benefit from the ‘pounds and pence’ system, a customer would typically need to be on a premium contract costing over £34 a month for mobile or £55 a month for broadband, MSE found.

Researchers give the example of a two-year Vodafone 3GB mobile contract starting at £10 a month in December 2024. Under the new rules, two £1.80-a-month hikes in 2025 and 2026 have pushed this bill up to £13.60 – a 36 per cent surge. But the old inflation-linked formula, would have seen it rise to £11.40, marking a rise of 14 per cent.

Mr Lewis also criticised the new clause that allows firms like Sky to bypass the upfront transparency rule, instead allowing them to give customers 30 days to leave penalty-free once notified of a hike.

The money experts argued that this has been ineffective, with most households only noticing the rise once the bill has arrived, by which time it is too late to cancel fee-free.

An Ofcom spokesperson: "We share Martin Lewis ’s drive to ensure that consumers get the best from their telecoms services at a fair price, and will continue to engage with him on these issues. We are keeping a close eye on the market and will be carrying out an in-depth review of the impact of our rules around pricing transparency, which we’ll publish in 2027

“Our rules are designed to ensure that customers have complete clarity upfront on the prices they'll pay throughout their contract, rather than being hit with unpredictable and volatile inflation-linked rises. The UK has a highly competitive telecoms market with overall prices falling in real terms in recent years. At the same time, companies are investing heavily in upgrading and expanding their networks, giving people more for their money.

“Our other protections mean it’s never been easier to switch away to a better deal, while eligible customers in receipt of certain benefits can take advantage of social tariffs at a fixed price.”

The regulator added that a total ban on mid-contract rises could lead to "unintended consequences," such as the elimination of upfront introductory discounts which providers use to compete for customers.