BT has announced a price hike of more than 9% from the end of March for most customers, as the cost-of-living squeeze continues to be felt.

The telecoms giant said those affected will end up paying an extra £3.50 a month – or £42 annually – on average for phone and broadband bills.

However, financially vulnerable households and those on certain packages, including BT Home Essentials and BT Basic, will be exempt.

The move follows a dramatic increase in data usage over the past few years, the company said in a statement.

It comes after figures from the Office for National Statistics (ONS) revealed two thirds of UK adults have seen their cost of living jump over the past month.

Some 66% of people surveyed had been hit by increases including steeper energy bills and rising food prices, according to the ONS.

Nick Lane, BT’s managing director for consumer services, said: “Price rises are never popular, but are sometimes a necessary part of business, if we’re to keep up with the rising costs we face.”

Working from home, online education and increased TV streaming have increased demands on the company’s network, with a 90% rise in broadband usage since 2018, and a 79% increase on mobile phones since 2019, he said.

BT changed how it raised bills around two years ago, introducing a system of one increase a year at the end of every March.

The hike this year will be 3.9% plus inflation, as measured by the consumer price index to reflect “rising costs to the business”, according to BT.

UK inflation rate
(PA Graphics)

Inflation soared to 5.4% last month, its highest rate since March 1992, as households faced surging food prices on top of sky-high energy and fuel bills.

Experts have warned that the cost of living will continue to climb over the next few months as gas and electricity tariffs are expected to rise by around 50% in April.

The Bank of England raised interest rates from 0.1% to 0.25% last month as it said inflation would hit 6% in the spring – and more increases are expected to rein in rising prices.