SIM-only vs phone contract: how to work out which is cheaper for you
A phone on contract looks tidy but usually costs hundreds more than buying the handset outright and pairing it with a SIM-only deal.
'£40 a month for a new iPhone' sounds fine until you multiply it out. Do the sums.
Step 1: the handset's actual cash price
Look up the phone at the manufacturer's own store (apple.com, samsung.com, google.com/store). That is the honest cash price. Everything else is finance.
Step 2: the SIM-only price for what you use
Most people use under 20GB a month. A 20GB SIM-only deal on a good UK network runs £8–£15/month. Unlimited SIMs are £15–£25/month depending on network and speed cap.
Step 3: the sum
24-month contract cost = (handset cash price) + (SIM-only monthly × 24). Compare that to (contract monthly × 24 + any upfront). If the contract is more than £50–£100 higher, you are paying interest for the phone — usually at 15–30% APR-equivalent, even when the ad says 0%.
When a phone contract does make sense
- You genuinely can't afford £800+ upfront and can't get 0% credit elsewhere.
- The deal bundles insurance, trade-in credit or streaming you'd have paid for anyway.
- You want the newest handset every 12 months and use an upgrade programme.
PAYG for light users
If you use your phone mainly on Wi-Fi and don't stream on 4G/5G, PAYG bundles on smart or Voxi can cost under £5/month. It rarely gets compared but it deserves to be.
Compare it yourself
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