Millions of BT customers face increases on their line rental and call costs at the start of next year – but you can avoid the price hikes.

The UK's largest home phone and broadband provider is increasing its standard line rental price by 3.5% on 4 January 2014 (see our Cheap Home Phones guide for the best buys).

It means standard line rental prices will go up from £15.45/month to £15.99/month. But the price of its Line Rental Saver, which costs £141 over the year (the equivalent of £11.75/month), won't change.

The telecoms giant is also upping some of its call rates by up to 6%. Key rate changes include:

  • Call set-up fees: Will rise from 13.87p to 14.76p per call.
  • Daytime calls to UK landlines and 0870 numbers: Will rise from 8.41p/minute to 8.95p/minute.
  • Evening calls to UK landlines and 0870 numbers: Will rise from 1.11p/minute to 1.18p/minute.
  • BT Answer 1571: This is currently free, but will now cost £1.75/month. BT says the voicemail service will now include a bigger mailbox, the ability to keep messages for longer and to retrieve them remotely.
  • BT Privacy with Caller Display: This is currently free if you make more than two calls a month, but will now also cost £1.75/month. This service registers you for the Telephone Preference Service to block unwanted sales and marketing calls (you can get this free anyway – see Stop Junk Calls) and shows the number of the person calling you. If you already have this feature and plan to stay with BT for another year, you can keep getting it free for the next 12 months if you register by 6 December. But remember, you may be able to find a better deal elsewhere.

BT says the changes will affect customers in different ways, according to the package they are on. All customers will be told about the increases next week, either by letter or email.

The rise will be the fourth set of hikes from the telecoms giant in just over two years. But you can escape your contract penalty-free, if you act in time.

Leave penalty-free

If you're still in contract, under BT's terms and conditions, as a price rise is considered to be to your "detriment", you have 10 days from receiving notice of a price rise directly from BT to terminate your contract without incurring an early termination fee.

You'll get your notification letter or email next week.

If your contract ends before 4 January and you're willing to switch elsewhere, or if you want to leave mid-contract as a result of the price rises, you can get line rental with no calls for as little as £5.99/month. See our Cheap Home Phones guide for all the best buys.

Avoid the hike by paying upfront

If you want to stay with BT, you can cut costs by switching to its Line Rental Saver option. You can do this penalty-free during your contract.

This costs £141/year you have to pay the whole sum upfront although if you switch mid-contract you will start a new 12-month contract.

Paying upfront means you'll effectively pay £11.75/month for line rental, instead of the new £15.99/month – a saving of over £50 across the year.

A spokesperson for BT says: "We review and revise our prices every year, given the market is extremely competitive. Whilst some prices may go up during the year, many go down or remain the same."