Is a SIM-only deal cheaper than a phone contract?

A SIM-only deal covers airtime only: your allowance of calls, texts and mobile data. You use your own phone, and contracts are often shorter — including one-month rolling plans you can leave with notice.

A handset contract combines two things: the cost of the phone and the cost of airtime. You may pay an upfront fee and then a monthly amount, usually over a longer term. Some providers show the phone and airtime as separate parts of the bill, and the phone part may be set up as a separate credit agreement, which usually involves a credit check.

Monthly prices alone can be misleading, so work out what each option costs over the full term. For a handset contract, that's the upfront cost plus every monthly payment. For the SIM-only route, add the cost of buying the phone outright (or the cost of keeping your current one) to the SIM-only payments over the same period.

• Include any upfront fee, not just the monthly payment
• Factor in the mid-contract price rises written into the contract
• Compare like-for-like data allowances, as unused data is money spent for nothing
• Consider what the phone might be worth if you sell or trade it in later
• Check any extras you'd actually use, such as roaming or bundled subscriptions

Many mobile contracts include an annual price rise. Since January 2025, Ofcom rules require any mid-contract price rises to be set out in pounds and pence in your contract, rather than linked to inflation, so you can see exactly what you'll pay.

Longer contracts lock you in for longer, and leaving early usually means paying early termination charges. On a handset contract, you'll normally still owe the remaining cost of the phone. Shorter or rolling SIM-only plans give more flexibility to move if a better deal comes along.

There's no single answer, but some situations point one way or the other:

• SIM-only may suit you if your current phone still works well, or you can buy a phone outright and want flexibility
• A handset contract may suit you if you'd rather spread the cost of a new phone and value having both in one bill
• If your handset contract has ended, check whether you're still paying the same amount — once a phone is paid off, moving to SIM-only or a cheaper airtime plan may make sense
• If you receive certain benefits, ask about mobile social tariffs, which some providers offer

Phones sold in the UK can no longer be locked to a network — Ofcom banned the sale of locked handsets in December 2021 — so a phone bought recently should work with any network's SIM. Older phones may still be locked, so check before switching.

To switch and keep your number, text "PAC" to 65075 to get a porting code, then give it to your new provider. To leave without keeping your number, text "STAC" to 75075. The free reply also tells you about any charges for leaving early. Your current provider must send you an end-of-contract notification before your minimum term ends.