Martin Lewis has issued an urgent warning after it was revealed that millions of broadband and phone customers are expected to see hikes in their monthly bills.
Nearly all providers link their annual price rises to December's consumer price index (CPI) which is published in January or the retail price index (RPI) with both being near their highest rate in 40 years. The latest CPI is at 10.5 per cent while RPI is at 13.4 per cent.
BT, EE, Plusnet, and Vodafone broadband contracts saw prices go up by CPI plus 3.9 per cent. TalkTalk saw CPI plus 3.7 per cent, Shell energy saw CPI plus 3 per cent while Sky and Virgin Media contracts did not stipulate a pricing formula in the same way.
Speaking on his podcast last week, Mr Lewis said: "The problem with these rises is they are inflation in their own right - above inflation rises don't just hurt now but they pump the inflation rate again. And it makes everything more difficult and it should not be allowed to happen."
He continued: "People signed up to a contract it seems to be unfair and it of course seems exponentially unfair with the high rates of inflation we have right now. Now, those people who are in contract in the vast majority of cases except for Virgin can do nothing....
"My warning to everybody...is 16 million people are out of contract on broadband or mobile and that means you are free to leave. So leave and switch and in many cases more than halve what you are paying.
"If you don't want to leave, haggle and try and bring down the price of what you are paying. That's the most important thing you should do right now.
"It will not forestall those rises because even the new deal that people sign up for are in most cases subject to those 14 per cent price hikes. However, 14 per cent of £20 is less than 14 per cent of £40 so cut what you are paying, the rise in pound terms will be smaller."
Many companies have given customers 30 days' notice of the price increases with consumer groups calling on households to take the opportunity to form a new deal if they are out of contract.
An Ofcom spokesperson said: “While Ofcom doesn’t set retail prices, companies must treat customers fairly – particularly during an exceptional period of hardship for many households. Our rules are clear: everyone must be told upfront about any future price rises before they sign up, and we’re investigating whether phone and broadband firms are sticking to this.
“We’re also concerned about the transparency of inflation-linked price rises in contracts, and how well they’re understood. We’re examining this issue to ensure customers’ interests are protected.”
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