Millions of Sky customers are facing an inflation-busting price hike – but if you're affected you may be able to haggle down your bill or quit your contract penalty-free, with one MoneySaver knocking more than £500 off his annual bill after following our tips.

If you've Sky broadband with line rental you'll be hit by the price hikes, and some will also see broadband, TV and call costs rise.

The telecoms giant is increasing the standard price of line rental for all but its landline-only customers from £17.40/month to £18.99/month from Wednesday 1 March. The £1.59/month increase – equivalent to an extra £19/year – will be communicated to customers by letter or email between Wednesday 25 January and Saturday 25 February.

This upcoming hike is the latest in a string of Sky line rental price rises in recent years, with the new monthly line-rental fee representing a significant 23% increase on the December 2013 price of £15.40/mth. The announcement comes just days after BT said it is hiking broadband and call prices and charging TV customers for BT Sport.

We've full info below on the price hikes and how to beat them. For cost-cutting tips and our pick of the best deals, see our Cheap Broadband and Digital TV Deals guides - and for inspiration see our success stories about how much Sky customers have already saved.

What's happening to line rental?

If you get your phone line and broadband service from Sky, from 1 March the cost of standard line rental will rise by 9% from £17.40/mth to £18.99/mth. Those who currently have a cut-price line rental deal will continue to pay less than the standard price but will still see what they pay rise by £1.59/mth.

However, if you're a landline-only customer you won't be affected by the line rental price hike at all and will continue to pay the price you do now.

What's happening to TV and broadband packages?

Sky TV and broadband customers on older, cheaper so-called 'legacy' deals which now cost more for newer customers – plus those who've previously haggled a special deal – will see an average increase of just under £3/mth, again from 1 March.

The exact amount your bill will increase by depends on what deal you're on – we asked Sky to provide a complete list of such changes but it refused, saying only that individual customers affected by these changes will be notified. But for example, if you're currently paying £7.50/mth for Sky's Broadband Unlimited deal, you'll have to pay £10/mth from 1 March.

What's happening to call charges?

If you're not signed up to a Sky Talk package, or if you make calls outside of your Sky Talk package, prices will rise from 1 April as follows:

  • Call connection charge: Up from 16.9p to 19p
  • Calls to UK landlines: Up from 11.5p/min to 12.54p/min
  • Calls to UK mobiles: Up from 11.5p/min to 19.35p/min (daytime), 14.25p/min (evening and weekend)

How to beat the hikes 1 – escape your contract penalty-free

If you're not happy with the price hike, you may be able to exit your contract with Sky penalty-free. But there's no point leaving in a huff if your current deal is still the cheapest out there – so check rival providers' prices and factor in exit fees before you ditch and switch.

If you do decide to quit your Sky contract, it's important to note:

  • If you're outside your minimum contract term for TV, phone and/or broadband, you can leave penalty-free – to ditch your contract, you just need to speak to a live chat adviser or call 03332 022 135 and give 31 days' notice for TV packages, or 10 days' notice for broadband and phone packages.

  • If you're still within your minimum term for a Sky broadband or phone contract affected by these price increases, you'll be able to cancel it without paying an early termination charge. To do this you must call Sky within 30 days of receiving its price rise notification. Sky says you can do this no matter when you first took out your contract.

  • If you're within your minimum term for a TV contract, unfortunately you can't exit it penalty-free as a result of these price changes. But if you're a Sky TV customer who's also affected by the threatened loss of 13 channels on Wednesday 1 February, you can use this as extra ammunition in your quest for a free exit.

Regulator Ofcom says if you're unhappy with the price hike you should complain to Sky, then escalate it to Ombudsman Services if necessary – see our How to complain guide for help. Even if you don't have the right to leave penalty-free, it's still worth haggling as you've a reason to ask for a better deal and Sky should be keen to keep you.

How to beat the hikes 2 – haggle, haggle, haggle

If you want to stick with Sky, there are ways to try to beat the hike – price increases can give you the opportunity to negotiate a better deal (check out our Sky Haggling guide for our top tips on how to do this). Our recent poll found 87% of Sky customers who tried to haggle were able to negotiate a better deal.

Here are a few tips to get you started:

  • Benchmark the best deal elsewhere so you ask for a realistic discount.
  • Get through to the retentions (sometimes called disconnections) department. They have the most power to slash costs, as their job is to keep you.
  • Use charm and be friendly. Aggression or anger will just put their back up.
  • Don't panic if they call your bluff and say they'll disconnect you.
  • Problems mean discounts, so if you've had issues with Sky in the past – eg, slow broadband – politely tell it when you haggle.

Hagglers report savings of more than £500

Since we first published this story our inbox has been flooded with success stories from people who followed the haggling tips below. Diane emailed us about her £559/year saving: "I took your advice as I received an email saying they were increasing my sky account to £126 month - some haggling but reduced contract to £79.41. This is full package plus unlimited Internet and telephone - amazing!"

Kate also got in touch: "Threatened to leave Sky, pointing out that I've been loyal to them for 20+ years and they should show me some loyalty in return! Result! Revised package will save me £280ish over 12 months!"

And Suzette said: "Just contacted Sky 'retentions' re £4 increase in my next bill. Successfully negotiated ten month decrease in costs from £58 to £40. Good deal or what!!"

What does Sky say?

Sky has told that the price increases are a result of "ongoing investment" in its technology and customer service, among other areas.

A spokesperson says: "There are no changes to our existing headline pricing for Sky TV bundles and the vast majority of customers will see no change at all to the cost of their TV package. We are also keeping line rental prices at their current level for customers who only take a landline from us."

Haven't other providers also hiked prices recently?

Sky isn't the only telecoms firm that's been putting prices up. Here's what other major providers have done: