Households without the internet pay £440 more per year

The Momentum UK Team 02 July 2014

Access to the internet has almost doubled in the past decade, but new research reveals the extent to which the “digital divide” is still holding many people back financially.

As you might expect, the number of internet users has increased rapidly over the last 10 years, from 46% of people in 2003 to 83% in 2013. However, new research indicates that things are becoming increasingly difficult for those left behind.

Seven million people in the UK have never used the internet, 72% of whom are in the poorest 10% of society – with an income of £128 or less per week. As can be expected, many of those without internet access are elderly; 48% of those aged 65 and over have never used the internet.

Research from the Centre for Economics and Business Research (CEBR) reveals the extent to which a lack of internet access is affecting people financially. So-called “offline households” pay an average of £440 more per year for goods and services than those who use the internet. This figure equates to 4.4% of the average income, a figure which rises to 5.4% for the over-65s.

Those who can’t take advantage of the lower energy and telecoms tariffs available for online-only services are missing out, to the tune of a potential £139 per year. This issue often also applies to those who either choose to pay their bills by cash or cheque, or use a pre-payment tariff or meter due for their utilities due to their circumstances.

The biggest saving to be gained from buying products online was found to be in communications services, with average savings of around 30% – or £88 – when bought online.

As well as a reduced ability to compare products and services to get the best deal, those without internet access often have to pay more for the use of paper bills. In another report, carried out by the Nationwide Foundation in association with Sliced Bread, one of the case studies highlighted this issue:

“Yeah, you get charged for paper bills. So if you haven’t got a direct debit, for [cable services provider] it’s like £2 [per month] for a paper bill... which I know it’s only £2 but it all adds up at the end of the day.

“When you’ve got five or six of them at £2, that’s a weeks shopping when you’re on benefits, you know.”

Judith Donovan CBE, chair of the Keep Me Posted campaign, commented on the findings:

Much progress has been made in ensuring that as many of us as possible can access the internet and the economic and social benefits it undoubtedly offers. However, the digital divide remains a big problem.

She added:

“A significant number of people have never, and probably will never, access the internet. Yet, this is where the impact on household budgets is the greatest. For example, the elderly and most disadvantaged in our society are typically out of pocket by around 5 per cent of their household income. It is clear that, whatever your household income, there is a cost for those who manage their affairs ‘offline’, be that through choice or circumstance. The Keep me Posted campaign is calling on service providers to give their customers the choice of receiving their bills and statements on paper at no extra charge.”

Of course, the environmental impact of paper bills must be taken into account. However it appears that the current system of charging individual consumers to receive paper bills – used by many utility and service providers – could be disproportionately affecting the elderly and vulnerable. For information on ways to save on your bills, visit our guide.