Virgin Media O2 has slashed the price of its social tariff as the telecom giant follows calls to support the hardest hit by macroeconomic headwinds.
The price of the basic band, which is specifically targeted at those receiving Universal Credit, will drop by 16 per cent to £12.50 per month for all new and existing customers, making it one of the cheapest packages in the market.
The price cut and new speed option build on a range of measures introduced by the firm and comes amid a cost-of-living crisis which is most adversely impacting low-income households.
Research from Ofcom, published last month, found eight million UK households are having difficulty affording communications services.
Charities have raised concern in recent months that a lack of internet access is holding people back from essential day-to-day activities – from shopping and entertainment to job searching and access to a range of online services.
Along with consumer bodies, including Which?, the firm is also calling for a cut in VAT on social tariffs, from 20 per cent to no more than five per cent which is in line with other utilities such as gas and electricity.
Virgin Media O2 has committed to directly pass on any VAT cut in a price reduction to all its Essential Broadband plans, which will mean a further price drop to just £10.93 for 15Mbps and £17.50 for 50Mbps packages, helping to generate extra savings for households that need them most each month.
“We have a long history of stepping up in tough times and now is no different. Connectivity remains an essential part of our lives, so we are boosting the support we provide to those who need it most,” COO Jeff Dodds said.
He told City A.M. that “doing the right thing” was “part of the company’s DNA”. “If you are a business that wants to be relevant and around in the future you have to build lasting relationships,” he said.
Dodds added that the VMO2 was hoping to expand the scope beyond Universal Credit and into pensions: bringing more Brits into the folds of this support.
David Buttress, the Government’s Cost of Living Business Tsar, said: “It is good to see Virgin Media O2 taking clear action to support their customers through the cost of living crisis.”