BT customers face a price hike of more than 9% from the end March as the cost of living crisis continues to be felt.

The telecoms giant said the increase will affect most of its customers and comes following a dramatic increase in data usage over the past few years.

BT broadband price rise - How much will it cost?

BT has said that customers affected by the price hike will see their phone and broadband bills go up by an extra £3.50 per month - or £42 annually - on average.

However, financially vulnerable households and those on certain packages, including BT Home Essentials and BT Basic, will be exempt.

BT changed how it raised bills around two years ago, introducing a system of one increase per year at the end of every March.

This year’s hike will be 3.9% plus inflation, as measured by the consumer price index to reflect “rising costs to the business”, according to BT.

Nick Lane, BT’s managing director for consumer services, said: “Price rises are never popular, but are sometimes a necessary part of business, if we’re to keep up with the rising costs we face.”

Mr Lane added that home working, online education and increased TV streaming have increased demands on the company’s network, with a 90% rise in broadband usage since 2018, and a 79% increase on mobile phones since 2019.

Cost of living squeeze continues

The rise to BT’s phone and broadband costs comes after figures from the Office for National Statistics (ONS) revealed two thirds of UK adults have seen their cost of living go up over the past month.

Some 66% of people surveyed said they have faced various price increases, including steeper energy bills and rising food prices, the ONS said.

Inflation soared to 5.4% last month, which is its highest rate since March 1992.

The increase has been attributed to rise in food prices, non-alcoholic drinks, fashion, fuel and energy costs, which is putting growing pressure on household finances.

Experts have warned that the cost of living will continue to rise over the next few months, with gas and electricity tariffs expected to rise by around 50% in April.

The Bank of England raised interest rates from 0.1% to 0.25% last month as it warned inflation would hit 6% in the spring, and more increases are expected to rein in rising prices.

The bank expects UK inflation to be in excess of 5% - above its 2% target - before the rate gradually levels out over 2022 and 2023.

Speaking about UK inflation rates going up, Chancellor Rishi Sunak said: "We know how challenging rising inflation can be for families and households which is why we're spending £4.2bn to support living standards and provide targeted measures for the most vulnerable over the winter months.”