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24-month contracts are the most expensive way to get a new device. The average UK phone bill is a whopping £45.60 per month for a bundled handset and tariff plan, according to research by Ofcom.
If you’ve got multiple family members to pay for, £45.60 per month, per contract is simply too much. And even if you only have to cover your own bill, that amount can seem really steep.
Fortunately, expensive 24-month contracts aren’t the only option. There are several alternatives that will see you paying less than £15 a month for your bill. In this article, we explore some of those options.
SIM-only or PAYG
The cheapest way to pay monthly for your bill is by opting for a SIM-only tariff. You’ll need to buy a handset upfront, and we’ll cover some ways you can do that cheaply below, but you will save significant sums over time.
SIM-only deals are available from all the big four networks as well as lots of mobile virtual network operators (MVNOs) such as GiffGaff, Voxi, Smarty, and Tesco Mobile.
The cheapest SIM-only deal we found at the time of writing was £3.95 a month. This deal from Lebara includes 200 minutes, 50 international minutes, unlimited texts and 500MB of data. It’s perfect for light phone users or those on a serious budget.
If you need lots of data, we found a 12-month SIM-only contract from Virgin Media with 5,000 minutes, unlimited texts and 25GB data for just £15 per month.
And if you can afford to stretch your bill to £20 per month, you can get unlimited calls, texts, and data from Three.
All those deals require a minimum of 12 months tie in, so if you want more flexibility then going for a PAYG SIM is another option, however, they tend to be slightly more expensive for a bigger allowance. For example, this guide lists all tariffs and the Three SIM that’s £20 on the contract is £35.00 on PAYG so if you are willing to be tied in for 12 months, the contract is a no brainer. For lower usage, PAYG makes more sense.
Buying a handset upfront
In order to take advantage of extremely cheap SIM-only deals, you need to already own a handset.
Many people can’t afford to buy an expensive smartphone upfront, so they turn to contracts to spread the cost. But it’s important to know that contracts are not interest-free. Most have hidden APRs of more than 20% and so the handset will cost you significantly more than if you just bought it upfront.
You have a few options here. You can forget about the latest iPhone and buy a ‘budget’ smartphone for less than £250. You can seek out cheap second-hand and refurbished deals through reputable resellers. Or you can buy a handset using alternative finance such as mobile-specific loans or 0% credit cards.
Alternative finance is generally cheaper than a 24-month contract. You’ll still pay a lot each month if you choose an expensive device, but if you opt for a lower-end model you can slash your monthly bills. You’ll then have your pick of SIM-only deals, and won’t be tied to a lengthy contract.
Don’t buy insurance
Mobile phone insurance adds anything between £8 and £15 per month to your phone bill. And in many cases, it’s a completely unnecessary expense.
When you buy insurance, you give money to a faceless corporation to protect your assets just in case. But what if you never damage or lose your phone? Or, what if you do but it’s not covered by your policy? You’re basically throwing money away.
A far better approach is to self-insure. This involves putting away a little money each month to cover you if you need to replace your phone. The money is yours to use exactly how you wish (no strict rules from insurance companies here) and if you put it in a savings account, you may even earn a little extra.
Self-insuring allows you to buy a phone upfront when you need it. It allows you to take back control from both the networks and insurance companies. It gives you the power to choose the very best deals for you, and save money in the process.
Budget 24-month contracts
If you must go for a traditional contract, there are a few ways to save here too. Generally, you can find some really cheap 24-month contracts but you’ll have to tolerate a budget smartphone or a limited tariff.
To keep your contract costs as low as possible, avoid the big networks. They are almost always more expensive than resellers or MVNOs.
Choose a cheaper handset; either a budget model or an older generation iPhone or Samsung Galaxy. The more expensive the handset, the higher your monthly bill will be.
Finally, use comparison sites like uSwitch or Billmonitor to find really cheap deals. Comparison sites draw in from a multitude of sources and often have access to exclusive offers. Use a couple of different comparison sites for the widest range of options.
At the time of writing, we found a 24-month contract deal with ID Mobile for £9.99 per month. The deal included a Samsung Galaxy A10 32GB for no upfront cost, and a tariff with 250 minutes, unlimited texts and 500MB of data.