Money Mensch: Hang up on costly phone-line rentals

By Martin Lewis, December 16, 2010
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Home phone users have been dealt a double blow this year, with price hikes in both April and October. Yet it isn't all doom and gloom - there are ways to cut costs. What's more, we have just seen the launch of the cheapest ever line rental deal (more on this later).

BT and TalkTalk's price rises have left many paying £150 to £160 a year for line rental alone. But there is no need to pay such sums. It is important to remember that whoever you pay for line rental, the actual wires remain the same.

Apart from cable companies, pretty much all the phone providers rely on a line provided by BT, even though deregulation means a different company bills you. Therefore, the only real change isn't to the line, but that calls are routed through a different providers' system. Pick the right provider and savings can be serious.

● Line rental £7.99 a month

The new cheapest deal is just £7.99 a month with inclusive evening and weekend calls, working out at £96 a month. That is £70 cheaper than line rental from one of the big boys.

To get it, you need to sign up to a year's contract on Primus Home Phone Saver tariff; the best way is via the Homephonechoices website. If you sign up directly with Primus, the deal looks similar, but the contract is 18 months and the call costs are slightly higher.

● Cheapest BT line rental £9.99 a month

Although the deal from Primus is a good one, I know that when it comes to phone lines many prefer to stick with a brand they know. If that's you, it is possible to considerably cut the cost of being with BT if you can afford to pay for a year upfront. Its Line Rental Saver deal costs £119.88 and includes inclusive weekend calls, the equivalent of £9.99 per month. Compared with BT's standard line rental, this is a £40 annual saving.

To put this in context, provided you are not in debt, you are far better paying up front for your phone bill than sticking it in the bank. There is nowhere you would earn £40 for nearly £120 over a year at today's rates.

For more options, including those which give some inclusive calls to mobiles and internationally within their line rental deals, or combined-broadband options, see www.moneysavingexpert.com/homephones

● Inclusive calls

One quick warning: when I talk about inclusive weekend and evening calls, don't assume everything is all fine and dandy. First of all, the calls only apply to those made to landlines - calls to mobiles still cost you.

And, just as importantly, they are only free for a set time; with BT it is the first 60 minutes, with Primus it is 90 minutes. After that, you can be charged quite a steep rate. So if you are making long calls, keep your eye on the clock. When you are nearly up to the limit, ask the person you are calling if they mind you hanging up and redialling - then it remains free.

● Slash the costs of specific calls on top

Just because line rental is cheap, it doesn't mean the cost of individual calls is cheap, though Primus does tend to be slightly cheaper than BT. However, there is a way to substantially sever many call costs.

The easy method is to secure an account with a specialist 'override' provider such as 18185.co.uk. You dial a prefix number (unsurprisingly, this is 18185) before making a call. Your call is then routed through its network and its call costs apply, thus 'overriding' your normal provider.

It is worth noting that override providers are 'no frills', so the reliability may not always be great. If the worst happens and their service isn't available, you can still make a call using your landline provider.

The savings can be astonishing. Using 18185 to call a landline during the day costs just five pence. That's not per minute, but per call. With BT it is 6.4 pence a minute and Primus three pence a minute.

In other words, around £4 cheaper for an hour's daytime calls. Calls to mobiles during the week are often about half the cost of using one of the big boys.

Yet don't assume override providers can be used with every landline provider. Some block them, but BT isn't allowed to under competition rules and I have a written promise from Primus that it won't do so until at least 2012.

● Cut the cost of calling overseas

This is where phone bills can be big money.

Of course, the cheapest way is internet-to-internet via services such as Skype. However, when it comes to calling someone on an actual phone, Skype is not the cheapest way.

Using specialist override providers for each country undercuts paying for calls on Skype. For countries including the USA, Spain and France this can be as little as half a pence per minute. To find the cheapest number for each country, I have a regularly-updated tool, which you can find at www.moneysavingexpert.com/callchecker

It is important to note that these prices are for calls from a BT line. Use a different line and costs can vary, so it is always best to do a short test call then check the cost on your bill first.

    Last updated: 2:40pm, December 17 2010