Notifications will arrive when a contract is up – and include information about how to renew it more cheaply
New rules, unveiled by regulator Ofcom, will force companies to show their customers the best deals to avoid them getting stuck in old and more expensive contracts.
The move could see up to 20 million customers get better deals by switching provider or entering into a new one with the same company rather than accidentally falling into an expensive contract by default, Ofcom said.
Ofcom said people who bundle their landline and broadband services together pay on average around 20% more when they are out of contract and this rises to 26% among customers who bundle in their pay-TV services.
It said that around one in seven customers do not know whether they are still tied to the original deal.
Ofcom's consumer group director Lindsey Fussell said: "We're making sure customers are treated fairly, by making companies give them the information they need, when they need it.
"This will put power in the hands of millions of people who're paying more than necessary when they're no longer tied to a contract."
The changes will involve providers sending tailored information to millions of individual customers, including the contract end date, the price before this date, any proposed changes and the best deals offered by their provider.
Ofcom said the new rules would not come into force until February 15 next year, giving companies nine months to make the necessary changes to their systems and processes to make sure they "get this right".
Additional reporting by Press Association