Is your mobile contract coming to an end? Don't just let it run on

If you’ve got a smartphone, you’ll probably be tied into a mobile phone contract and spending around £30 - £50 a month on it – and usually locked in for 24 months. So why do we end up paying so much? 

Mobile contract plans usually lump the cost of buying the phone and the bundle of calls, texts and data together. Handsets like the iPhone 6, for example, cost £600 to buy outright, which is beyond the reach of most people. That’s why many of us choose to include the handset as part of a monthly contract plan, and spread the cost over its duration, even though it ends up costing more than buying it outright. 

Don’t rush into a new contract 

However, once a contract ends, you’ve paid for your phone – so if you simply continue to pay the same amount you are overpaying! That’s because even when you don’t choose to upgrade your handset, most network providers will keep charging you for the same bundle you originally agreed to. 

Surprisingly, a survey by Which? found that half of those who got to the end of their contract did not switch provider or deals right away. This effectively leaves customers paying for a handset they’ve already for. That’s why it’s important to look for a new mobile deal as soon as you reach the end of your contract – even if you don’t want to change your phone. 

Split billing options 

O2 and Tesco have plans that enable their customer to see the cost of the handset and billing separately. They make it clear that once the handset is paid off in full, the airtime amount will be all that’s left to pay monthly. O2’s Refresh plan also enables customers to upgrade handsets without paying the full cost of their contract or fee to terminate it.

This is normally standard procedure when signing up to a fixed term contract. It means you have to pay off the remaining cost of a contract, if you choose to upgrade your handset midterm. 

For example, if you’ve six months left on your contract costing you £50 pounds a month, you’ll have to pay £50 for 6 months – that works out at £300 pounds. This is a big lump sum payment and you’ll have to decide whether the latest handset is worth that extra cost. If there are only a few months left on your contract, why not ride it out until it’s time to upgrade instead and save yourself some cash?

Think about sim only and pay as you go

Remember, when your contract ends, it means you’ve paid off your handset and it belongs to you. This gives you the flexibility to choose a sim only, or pay-as-you-go deal. For example, a SIM only bundle from giffgaff gives you unlimited texts, data and calls for £20 a month. This is a massive saving on your old plan if it was costing you £50. 

Though the latest smartphone release can be appealing, the newest model usually has few improvements when compared to the last one. It’s certainly worthwhile holding on to your existing phone for as long as you can, and make savings by paying for your airtime only.