I typically ignore most of my text messages as they're usually 'your bill is ready to be viewed' or 'your parcel is set to be delivered between 1pm and 3pm' but last week I received a text from EE that I had to double-take.
It was no surprise that my plans' price would be increasing - not with energy bills and our pet insurance also going up. However, the wording of the email left me totally confused and burying my head in the sand over maths.
Their message to customers read: "Dear customer, on 31 March 2022 your price plan will increase in line with the Consumer Price Index (CPI) rate of inflation published in January plus 3.9%. For example, a £18.00 price plan will increase by £1.67 a month.
"Your out-of-bundle charges and other add-ons will also increase in line with the CPI rate of inflation plus 3.9%. For example, a £1 add-on will go up by £0.09 a month.
"Calls and texts to EU countries from the UK will also increase on the same basis and will increase as of 31 March each year by the CPI rate of inflation published in January plus 3.9%.
"This change will take place 30 days after you've received this text. You'll find details of any active add-ons you may have and how much you spend on calls to the EU on your latest bill or in MYEE. "
Now, a nearly 4 per cent increase doesn't seem so bad, but it's the CPI part that had me scratching my head, and upon Google searching, I was met with a math equation that induced anxiety like an A-Level algebra exam.
But others have worked out the price hike is due to inflation on top of other additional charges, and will total a nearly 10 per cent increase.
Some customers have branded the email as 'confusing' and 'unclear' as many scrimp and save to battle with the cost of living. EE say they are contacting customers, via email, post and SMS, well ahead of their prices changes.
The mobile network provider has said customers will see a change of 9.3%, based on December’s rate of CPI 5.4% +3.9% but they also say they are committed to supporting customers on low-incomes or facing financial hardship who may be struggling.
In short, EE users whose contract began after August 31, 2020, or started after September 1, 2020 but will finish before April 2022, will see the price change come into effect by March 31 2022.
And it's not just EE either, mobile providers across the UK are increasing their prices due to inflation, and other streaming providers have also increased their bills by up to 30% in the last year.
Every month, the Consumer Price Index, or CPI, releases new figures that measure the rate of inflation. The rate of inflation accounts for the cost of goods and services over time, and the CPI is based on household spending in the National Accounts.
In December 2021, the CPI figures showed that the rate of inflation for the UK is 5.4% - an already high number, considering in January 2021 the rate of inflation was just 0.7%.
It’s this figure that EE is using to increase their bills, so customers could already expect a bill increase. Here's the catch though.
They’re also adding an additional 3.9% charge to their customers' bills, in order to help them cover further costs, such as opening new stores and advancing their technology.
EE refers to this as CPI+3.9%, and it means that along with the 5.4% inflation increase, you’ll also be charged an additional 3.9% of EE’s own price increase.
That means that as of 31 March 2022, your rates will go up by a massive 9.3%. For example, if you currently have an £18 monthly bill, this would increase by £1.67 a month.
This continues to rise though, so if your bill is usually around £45, you’ll soon be paying £49.19 every month.
This charge also applies to your add-ons, too, so if you have an additional £1 add on on your contract, this will go up by £0.09 a month. You can use EE’s price calculator to work out just how much your new bill will be.
However, EE have emphasised the changes are necessary for them to continue to provide a good service to their customers.
An EE spokesperson said: "Two years ago, we decided to change the way we implemented price changes.
"Instead of unexpected, and inconsistent price changes throughout the year, we introduced a single contracted price rise, that would happen annually from 31 March.
"As usage across our networks continues to increase and with our customers relying on us for connectivity more than ever before, it’s crucial we continue to invest in our networks, services and the latest technology.
"As such, and in line with our terms, our prices for existing customers will be increasing from 31st March, with a similar rise also being introduced for new customers.”
It’s not just your contract that these charges will apply to.
The increase also includes costs of calls and texts to EU countries from the UK, and will continue to increase by March 31 each year.
EE used to base their increases on RPI - the Retail Price Index - rather than CPI.
Whilst both measure rates of inflation, they consider very different things.
RPI takes into account the cost of housing, such as mortgage interest payments and council tax costs.
The Consumer Price Index ignores these, but instead considers how much each household is spending in the National Accounts.
EE has opted to move away from RPI, and instead use CPI’s figures to determine the cost of inflation, as is now more common in the UK.
