BT hikes costs but cuts up-front package charges

But it is also cutting the price of line rental for those who pay up-front, which could mean a £30 a year saving.

The UK's largest telecoms company, with 12.5 million customers, will implement the changes this October with most customers informed by letter this week.

What are the new charges?

• Line rental. This is rising from £11.54 a month to £12.04 a month (£12.79 to £13.29 for postal billing). This comes without a minimum term for existing customers but a minimum 12 months for new customers.

  However, if you pay up-front for 12 months before 29 October, it'll cost £113.88 (£9.49 a month) or £131.88 (£10.99) after that. This option, called Line Rental Saver, is only available with email billing.

  Those currently locked into a BT contract can exit without charge to take the offer. If you pay before 29 October, you'll save just over £30 a year compared to the new email billing cost.

  The packages mentioned come with inclusive weekend calls to landlines. The cost of upgrading to inclusive landline calls at anytime stays at £4.99 a month.

• Daytime call costs. These are rising from 5.9p per minute to 6.4p per minute.

• Call start-up fees. All chargeable calls also come with a one-off fee in addition to the per minute cost. This is rising from 9.9p to 10.9p.

BT says the impact of the call cost rise will be 1p per day, on average.

How can you beat the call cost hikes?

If you make daytime calls, international calls or calls at any time to mobiles outside your inclusive minutes on your mobile, you can slash costs by dialling a prefix to re-route your call to a cheaper provider.

Use the Callchecker or International Callchecker service to find out the cheapest 'override provider', as it can vary depending on the type of call made.

Some regular international callers save hundreds of pounds a year.

How can you cut line rental costs?

While BT is reducing prices for packages, it can still be beaten on line rental.

You can get Primus Home Saver line rental including evening and weekend calls for £8.99 per month if you sign up for a year via a comparison site (direct, it's £9.99/month). You must pay by direct debit (full details in the Home Phones guide).

Even if you're locked into an existing contract, new rules from communications regulator Ofcom mean it will cost significantly less to exit early.

Instead of paying the standard line rental cost for every month remaining, you'll pay from £2 per unused month on BT, from £3 on TalkTalk and from £4 on Virgin Media.

Talk Talk introduced new charges on 1 June (except for its Tiscali brand, where they'll change on 1 November). Virgin Media and BT will introduce the new costs in October.

Further reading/Key links

Cut call costs: Cheap Home Phones Find override providers: Callchecker, International Callchecker