New research has revealed that broadband customers could be losing up to an estimated £118 million every month due to being out of contract with their current provider.

According to the study, approximately one in nine UK adults (11%) are out of contract with their current broadband provider and are yet to switch to a new deal. Out-of-contract customers are often moved to a more expensive standard rate, often costing more than £20 extra per month compared to their contract rate.

This means an estimated 5.9 million people could be paying more than they need to for their broadband, equal to up to £118 million in additional costs every month, simply because they’ve delayed switching providers.

The figures, which come from a survey by Go.Compare broadband, added that a further 4% of adults don’t even know whether or not they’re out of contract with their provider. This means the true figure of those making this error could be even higher if these users are also out of their minimum term.

This comes just days before broadband providers’ annual price hikes are set to be implemented, with some increasing rates by as much as £4 per month. This means those who are out of contract could see bills increase even further if they don’t switch by the end of the month, but they can avoid the rises and make a huge saving by getting a new deal now.

Men and younger adults are most likely to make this mistake, according to the comparison site’s survey. Overall, 12% of men said they are out of contract and yet to switch (compared to 9% of women) while 15% of under 25s stated being in the same position – the highest percentage of any age group.

Previous research by Go.Compare also found that many broadband users also pay for faster speeds than they actually need. It revealed that just over a quarter (29%) of broadband users could switch to a cheaper package with slower speeds without noticing a difference in their broadband performance.

These users are thought to be overpaying by around £7 per month on average. Nationwide, this would be the equivalent of up to £52.1 million per month being overpaid on unneeded broadband speeds, equal to a potential £625.3 million every year.

The average broadband speed users pay for in the UK was found to be 115 Mbps. But these speeds aren’t needed for those who just require basic internet usage, like general web browsing and HD video streaming on a small number of devices.[5]

Catherine Hiley, spokesperson at Go.Compare broadband, said: “Out of contract rates are almost always much higher than contract prices, with costs going up by around £20 per month or even higher in some circumstances. For example, my own broadband price will rise by around £50 a month if I don’t switch at the end of the contract. So forgetting to compare deals and switch providers when your contract is up can be a very costly error.

“This is especially important now, as providers’ annual price hikes are set to take effect in a matter of days. This means your rate could go up even more if you don’t switch by the end of the month. But you have the chance to make a big saving and avoid the increase altogether by locking into a new contract before the rises are implemented. Doing this sooner rather than later could bring substantial savings over the course of the year.

“Try to avoid overpaying for faster speeds than you need, too. While it’s tempting to go for the fastest speeds you can afford, there’s no need to fork out if you only use your internet for basic activities. For example, if you just use your internet to browse your emails and watch low-resolution videos from time to time, speeds around 30 Mbps might suffice.

“On the contrary, if you have a house full of people who are streaming 4k videos, gaming online and working from home at the same time, you’ll probably need speeds in excess of 100 Mbps. It can be complicated to work out what speeds you need, but there are plenty of speed recommendation tools out there like this one to help you work it out. Just tell us how many devices your household uses and what type of devices they are and we’ll give you an instant estimate.

“Remember that there are other factors to consider aside from speed and price, too. Many broadband packages include extra perks like streaming deals and free gifts, so be sure to take these into account to make sure you’re getting the best value for money.”

More information on reducing broadband costs can be found on Go.Compare’s website.