Raising your prices is a normal part of running a business. Costs go up, markets shift, and your pricing needs to keep pace. But how you communicate a price increase to customers matters just as much as the increase itself. Get it wrong and you risk breaching your contracts, falling foul of consumer protection law, or damaging hard-won customer relationships.
This article explains what UK law requires when you increase prices, how your contracts should handle it, what a price increase notification needs to include, and what happens if you do not follow the rules. If you need advice tailored to your specific situation, our commercial law solicitors are here to help.
Is there a legal obligation to notify customers of a price increase?
The short answer is: it depends on your contracts and your sector.
There is no single piece of UK legislation that sets a universal price increase notice period for all businesses. Instead, your obligations come from a combination of:
- Your contractual terms
- General consumer protection law (where your customers are consumers)
- Sector-specific regulation (for telecoms, energy, financial services and similar industries)
For businesses selling to consumers, the Consumer Rights Act 2015 requires contract terms to be fair and transparent. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 also place obligations on how pricing information is disclosed and how changes are communicated. The Consumer Protection from Unfair Trading Regulations 2008 prohibits misleading commercial practices, which can include how a price change is presented.
For business-to-business (B2B) arrangements, contract law governs the position more directly. The same principle applies: you need the right contractual mechanism in place before you can lawfully impose a price increase.
Contract price increase clauses: what you need to know
Your starting point should always be your contract. If you want the ability to increase prices during an ongoing arrangement, your contract must include a price increase clause, also known as a price variation clause.
That clause must be:
- Clear: customers must understand when and how prices can change
- Fair: broad wording that reserves the right to increase prices “at any time, for any reason, without notice” is likely to be found unfair and unenforceable
- Transparent: the basis for any increase should be stated, whether linked to inflation, cost inputs or another defined trigger
If your contract does not include a price variation clause, you generally cannot impose a price increase without the customer’s agreement. Attempting to do so risks a breach of contract claim.
Many businesses operate on standard terms drafted years ago that may not meet current legal standards. If you have not reviewed your terms recently, it is worth doing so now.
How much notice should you give?
There is no statutory minimum notice period that applies to all businesses. However, 30 days is widely recognised as a reasonable minimum for subscriptions and ongoing service contracts. In regulated sectors, specific notice periods are mandatory.
Sector-specific requirements include:
- Telecoms: Ofcom requires providers to give customers at least 30 days’ notice of price increases. If the increase goes beyond what was set out in the original contract, customers must be able to exit without penalty.
- Energy: Ofgem requires suppliers to notify customers clearly of any changes to price or tariff.
- Financial services: the Financial Conduct Authority (FCA) sets specific notice and disclosure requirements for regulated firms.
Outside regulated sectors, the key question is whether the notice you give is reasonable in all the circumstances. A price increase announcement sent the day before it takes effect is unlikely to satisfy that test, even if your contract is otherwise in order.
What should a price increase notification include?
Whether you are sending a price increase letter, an email, or a formal written notice, the notification should cover:
- The current price and the new price
- The date on which the new price takes effect
- The reason for the increase (where possible)
- Any right the customer has to cancel or exit the contract as a result of the change
- Contact details for queries
A clear, straightforward price increase announcement reduces the risk of disputes and demonstrates good faith. Burying the change in small print or presenting it ambiguously can expose you to complaints and, in a consumer context, regulatory scrutiny.
B2C vs B2B: does the distinction matter?
Yes, significantly.
Where your customers are consumers, the Consumer Rights Act 2015 applies strict fairness and transparency standards to your contract terms. A price variation clause that gives you broad discretion to increase prices without defined limits is likely to be found unfair and therefore unenforceable. Consumers must also be given a genuine right to exit the contract if they do not accept the new price.
In B2B contracts, the parties have greater freedom to agree terms. However, your contractual wording still needs to be clear and unambiguous. Poorly drafted clauses create uncertainty and room for dispute.
What happens if you get it wrong?
Failing to follow the correct process when raising prices can lead to:
- Breach of contract claims from customers who did not agree to the increase
- Unfair contract terms challenges under the Consumer Rights Act 2015
- Regulatory action in regulated sectors, including fines and enforcement notices
- Reputational damage if customers feel misled or treated unfairly
Prevention is always cheaper than dispute resolution. Getting your contracts, notice procedures and communications right from the outset protects your business and your customer relationships.
Frequently asked questions
Can I increase prices mid-contract?
Only if your contract includes a valid price variation clause that permits it. Without such a clause, you would need the customer’s consent to change the agreed price. Attempting to impose a mid-contract increase without the right contractual basis risks a breach of contract claim.
Does a price increase notice have to be in writing?
Your contract may specify the required form of notice. Even where it does not, putting price increase notifications in writing provides a clear record and reduces the risk of dispute. Written notice is strongly advisable in all cases.
What if a customer refuses to accept the price increase?
If the contract gives you the right to increase prices, the customer’s options depend on what the contract says about termination. For consumer contracts in particular, customers must be given the right to exit penalty-free if they do not accept the new price. In B2B arrangements, the position depends on your specific contract terms.
Do these rules apply to one-off sales as well as ongoing contracts?
Price increase notification obligations are most relevant to ongoing contracts, subscriptions and long-term arrangements where prices can change during the relationship. For one-off sales, the price is agreed at the point of purchase and cannot be changed unilaterally afterwards.
Speak to Ignition Law
Whether you are reviewing your standard terms, drafting a new price variation clause, or preparing a price increase notification for your customers, Ignition Law can help. As a B Corp law firm, we work with UK businesses of all sizes to ensure their contracts are commercially sound and legally compliant. Our commercial law solicitors provide practical, clear advice focused on your business outcomes.
Contact Ignition Law today for guidance on price increase notice requirements and commercial contract terms.
