Mobile phones are more of a necessity than a luxury nowadays, with people relying on their handsets for everything from staying in touch with family and friends to paying for their shopping.

A staggering 93% of the UK adult population own or use a mobile phone, according to telecoms regulator Ofcom.

But are they paying too much? Well, according to statistics from consumer group Which?, 72% of mobile customers pay over the odds for their contract by an average of £159 a year.

When it comes to buying a smartphone, you have two options: sign up to a lengthy bundled contract or splash out on an unlocked SIM-free phone and choose a SIM-only tariff.

According to mobile expert and chief executive of UNSHACKLED.com, John Whittle, with a bundled contract you’re usually required to pay a large upfront payment and then pay high monthly bills for a tariff “that’s not always good enough”.

Buying SIM-free is the more cost effective option, but you often have to shell out a hefty sum upfront for the phone, and most of the flagship phones now cost well over £500.

Here, Whittle offers his tips for saving money on your phone contract:

Buying phone and SIM separately

When buying a phone over 24 months, you’re borrowing money on an expensive APR and while it reduces the initial outlay, it’s more expensive in the long-run.  Buying a phone and sim separately is often more cost-effective.

Checking usage

Instead of forking out for data allowance you don’t use, work out how much data you use and exactly what you will use your phone for and buy the appropriate package. You can do this by downloading your network’s app to see what your monthly usage is.

Don’t be complacent

Be aware of when your contract ends. Research shows people are overpaying after their contracts have ended to the tune of half a billion pounds a year.

Don’t tie yourself in

Shorter contracts are better because those locked into 24-month contracts won’t benefit from any price falls or deals until it’s up for renewal.