The real cost of home broadband

📈 Quickest read: Fact sheet
📃 Full report: The Real Cost of Broadband
#️⃣ Deep dive: Economic Modelling

As the cost of living crisis continues, attention is rightly focused on the essentials: housing, food and utilities. Affording good quality, home internet is rarely included in this discussion, but it is unarguable that a reliable home connection is essential for almost all aspects of life, from socialising to work, shopping to accessing healthcare and other public services. 

As part of our work on digital access and health with Impact on Urban Health we have looked in detail at how affordable home broadband is, particularly for lower income households, and found significant challenges.

The poorest households spend a much bigger proportion of their disposable income on broadband than the average household: 3.5 times more. Compared to the richest households it’s even worse, with the poorest spending almost 12 times more of the money they have left after they have paid for housing. For some lower income households this is 5% of their disposable income, at a time when many have no wiggle room in their budgets at all.

The cost of broadband is rising for everyone, but for low income households the rise in expenditure is steeper than for everyone else: a nearly 4% rise for poorer households compared to 0.04% for the richest. 

Although there are cheaper, social tariffs available from many broadband providers, they unfortunately don’t solve the affordability challenge. We looked at different types of households on a low income, including those receiving in-work benefits, pension credit and disability benefits, and even on a social tariff all of them would be spending a bigger chunk of their disposable income than the average household on broadband. 

There are also millions of households who struggle to afford broadband but aren’t eligible for a social tariff, normally because they are not receiving a qualifying benefit. Social tariffs may be imperfect, but they could make some difference to the estimated 2.4 million people that are struggling to pay mainstream broadband prices but aren’t eligible for one.

This affordability gap, in which the cost of social tariffs is still too high, and huge numbers of people aren’t even eligible for one, represents a failure of the broadband market to meet the needs of millions of consumers. It creates and deepens inequalities, and puts additional burdens on households and families who are already under significant pressure. 

You can find more details on our work around affordability and social tariffs on our Community Connectivity project page where we’ll also be sharing more about our exploration of truly affordable, community-led solutions to the affordability gap over the coming months.