MILLIONS of households could save £120 a year if VAT was cut on telephone, mobile and broadband bills, according to Which?.

Over six million households are struggling to pay their bills due to the cost of living crisis, the consumer group warned.

Households, including those on cheaper social tariffs for low-incomes, currently pay 20 percent VAT on bills.

Which? says that by cutting the VAT rate from 20 percent to 5 percent would see bills drop by an average of £120 a year.

It would also bring the rate in line with other essential bills, such as gas and electricity.

Households have been hit by broadband bill rises adding up to hundreds of pounds this year, while grappling with soaring inflation and energy bills.

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Rocio Concha, Which? director of policy and advocacy, said: "The fact that millions of households have made sacrifices to prioritise their broadband and mobile connections during the cost of living crisis demonstrates how essential these services are.

"To help cut bill costs, the next Prime Minister should reduce the VAT paid on telecoms in line with other essential services."

A Treasury spokesperson said: “We understand that people are struggling with rising prices which is why we have acted to protect the 8 million most vulnerable British families through at least £1,200 of direct payments this year.

“We have also secured strong commitments from broadband and mobile companies to help those worried about their bills during this difficult time such as allowing them to move to cheaper packages without charge or penalty, or agreeing manageable payment plans.”

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An Ofcom spokesperson said:  “It is vital that phone and broadband services remain affordable at a time when many people are struggling with the rising cost of living.

“There is a moral imperative on providers to support for those on low incomes, and they must do as much as possible to ensure more people can take advantage of the significant savings available.”

How can I cut my bills now?

Firstly, check if you can save by switching provider. Most on average can save up to £150 a year by doing so.

If you're out of contract, use a price comparison website such as BroadbandChoices or MoneySuperMarket to check if you can switch and save.

If you're happy with your provider and don't want to switch, it's worth checking if you can bring your contract cost down by haggling.

The best deals aren’t always advertised widely and you could save £120 a year by haggling.

In fact, you may need the gift of the gab as you can often get the biggest savings by haggling with your provider.

If you're really struggling, some firms offer social tariffs for those on the lowest incomes.

In most cases, you'll need to be a recipient of certain benefits to qualify for these ultra-cheap tariffs.

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The benefits accepted for these tariffs are usually Universal Credit, employment and support allowance, pension credit (guarantee credit element), income support or jobseeker's allowance.

BT, Now, Sky, TalkTalk and Virgin Media all offer these exclusive social tariffs – with prices staring at £15 a month.

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