Ofcom data suggests a fifth (19%) of all handset customers are currently out of contract and paying outdated prices that reflect the cost of paying back a phone, even though this ‘payback’ period has been completed.
This ‘double paying’ means providers could be collectively cashing in an additional £1.77bn per year.
Save money with a SIM-only deal
Mobile users can save money by switching from a contract with a handset included to a SIM-only deal. SIM-only deals typically have a lower monthly rate for more data and minutes – but you’ll need to provide your own handset.
Uswitch calculations suggest that making this switch can save mobile customers an estimated £351 per year.
Beyond savings, they can also offer greater flexibility with shorter-term contracts, and many providers offer free EU roaming. A lot of SIM-only deals even come with perks typically associated with higher-value handset contracts.
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For example, Vodafone offers SIM-only deals with entertainment packages, including access to YouTube Premium or Amazon Prime. Alternatively, Lebara’s 1GB rolling contract-free one-month plan offers an impressive bundle of perks worth more than 20 times the monthly cost of the plan itself (£3.95), including discounts at Iceland and Gousto, and up to £50 for each referral.
How to switch to a SIM-only deal
If you’re not sure whether you’re in contract, text ‘INFO’ to 85075. If you do choose to switch providers, you can still keep your old mobile number.
If you text ‘PAC’ to 65075, you will receive your PAC code. Once you receive the PAC code from this number, give it to your new provider and it will do the rest.
Ernest Doku, Uswitch’s mobiles expert, said: “It’s important to remember that if your bundled phone contract includes a handset, you’re essentially ‘paying it off’ with your monthly phone bills. Once your initial contract ends, you’ve contractually finished paying off the phone. However, this won’t be reflected in your monthly payments, and you’ll continue to pay the same amount as before, if not more.
“If you already own a phone, switching to a SIM-only contract can save you a significant amount of money in the long run; they typically offer lower monthly rates, since you’re not paying for a new phone.
“If you’re still in contract, remember to set a reminder for when your contract ends. Even seemingly small costs can add up over time, so it’s crucial to review your contract and make changes as needed.”
Related: Are you missing out on £200 by not recycling an unused smartphone?
