Internet Costs and Household Budgets

Internet or broadband expense is what you pay for internet fees each month. Your internet plan can be bundled with other services such as TV and phone. In case you require only broadband, you can opt for a stand-alone broadband service.

What are the factors determining internet expense?

Internet expense is usually dependent on two factors:

  • Internet speed: Typically a speed of 10 Mbps is enough for one household. If more users are simultaneously using the same line, the speed gets divided, and you may require a higher speed.
  • Usage limit: Usage limit depends on your main uses of the internet. If you use the internet for only browsing, you need a lesser limit. If you use the internet for streaming music, TV shows, and movies, or playing online games, or heavy downloading, you will need a higher limit.

A typical internet plan?

If you are going for internet services from the same provider as telephone services, your plan will also include a combined fixed line rental for telephone and internet. If you choose a standalone broadband plan, you don't have to pay line rental.

Example standalone broadband deals:

PlusNet offers a plan named PlusNet Unlimited with an annual cost of £181. This plan offers a speed of up to 17MB with no limit on usage. Contract is for 12 months, and you need to pay a one-time setup fee of £30.99 for a router and for setting up the connection.

Another example of a standalone broadband deal is Virgin Media 50MB Broadband. This plan does not require a phone line, and so there is no line rental. Speed is up to 50 MB, and there is no limit on usage. The annual fee for this plan is £368 and it has a one-time set up fee of £49.95.

Increase in line rentals

If you are considering a combined telephone and internet service, you should note that line rentals for such a service have been increasing. In 2014, average line rentals are £15.35 each month, which have gone up from the monthly £11.14 in 2009. According to a recent survey 37% of home phone users said they were paying line rental only for broadband usage, and they were not using the home phone at all. That is because the use of fixed lines has reduced significantly over the past few years. So if you don't require a landline phone, you should consider going for a standalone broadband plan.

How to choose the correct internet plan?

You should choose the right speed and the right usage limit as per your needs. Also, when looking for a deal check out the fine print. Most deals have a lower headline price and a higher price after 6-12 months. If you invest time in research and comparison, you can save some money on the internet expense, and this can improve your household finances.

Use our household budget calculator to check how internet cost affects your household budget.