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You’re likely paying hundreds of pounds too much on your mobile phone.

In the past I’d happily upgrade to a two-year mobile contract so I could get my hands on the latest iPhone, paying more than £35 each month plus a sizeable upfront fee. But that’s a thing of the past – I’m currently spending just £8 a month on my mobile phone bill. 

I was with O2 for probably 10 years, but five years ago I moved to Three and bought a new handset direct from Apple. Since then I’ve moved between networks and bought and sold new handsets. And saved a ton of cash.

Right now for example, the closest equivalent tariff direct from O2 (5GB of data with an 128GB iPhone 11) would cost £55.25 a month for two years, plus £30 upfront. That’s a total of £1,284 over 24 months. Buying the same phone outright direct from Apple combined with my Three deal (8GB of data) and the two year total is £929, saving £355. I actually paid £125 less for this handset, meaning by actual saving is £480 – or £240 a year!

Let’s assume it’s a similar saving each year over the last five years and that I only keep a phone for two years. That would mean I’m at least £1,200 better off! 

Even if you’re already on board with going SIM-only, it’s still possible to save. My wife Becky recently moved from SIM-only with O2 to SIM-only with Three, and thanks to cashback her bill will drop from £15 a month to £5.50. That’s a saving of £114 over the next year.

I can’t promise you’ll cut your bills by as much as this, but follow these tips and there’s no reason you should be paying more than £10 a month. Here’s how you too can save on your mobile phone contract.

Don’t wait for your contract to end

One of the worst tricks networks would use to make extra cash was to let you keep paying for a phone and SIM after a contract had ended. This meant many people would still be paying for a handset even after they’d covered the cost.

However, new rules from Ofcom mean most mobile networks will let you know when your contract is due to end and also move you to a cheaper deal.

This is a great nudge, but it doesn’t mean you don’t need to do anything. Even if you’re on a cheaper deal, it doesn’t mean you’ll be on the cheapest deal, as the following tips will show. 

Plus, it currently only applies to tariffs purchased directly from the network (i.e. not from an online or high street phone shop), and not all networks have signed up, with Three the main big name missing from the agreement.

Personally, I’d not wait for this to happen as you can usually negotiate with your network up to 30 days before the end of a contract. This gives you the chance to see if you can get a better deal with your current network, and if not start the process of moving to a cheaper one.

Go SIM-only

The best prices are often with SIM-only deals. Here you keep your old handset or buy a new one separately and pay just for your minutes, texts and data.

You can get contracts that run from 30 days to a year, giving you far more flexibility than the 18 and 24-month deals you’re tied to with handsets.

Since you aren’t paying for a new phone, the monthly costs are also considerably less. If you follow the rest of my tips as I did, you might even be able to pay less.

When I spot any really good prices I’ll share them on my mobile SIMs and phones deals page.

Don’t get your handset via your network

Once you go SIM-only you’re no longer caught in that bi-annual cycle of getting a new phone when you don’t really need to. Ideally you’ll keep your handset for more three or four years. But with poor batteries and broken screens, we all need to upgrade at some point.

However, you should avoid getting one as part of your contract. Most networks will charge you a premium on top of the handset price to get a new phone bundled with your SIM. It’s very, very rare for these deals to work out cheaper. Instead, you’ll save money buying it outright from Apple, Samsung or the likes of John Lewis.

Of course the high cost of these handsets can be a barrier, but even then you don’t need to resort to including it in a contract. Apple offers 0% finance for two years, while you could choose a 0% purchase credit card instead. Do check your credit score first though.

Don’t just stick to the big companies

You’ll have spotted that most of the cheap deals are with smaller networks. And I bet you’re warry of switching in case you can’t get reception.

Well, there are actually only four different phone networks – O2, EE, Three and Vodafone. All the others “piggyback” on one of these. So, for example, Giffgaff runs on O2 and BT Mobile uses EE.

This means you get exactly the same reception as someone on the host network but at a far lower price. The only real difference will be in customer service, though you’ll also lose network-specific benefits from the big brands, such as O2 Priority Moments or Three’s global roaming.

I’ve written in more detail about these so-called “virtual networks”, including which ones operate on which main network.

It’s also relatively easy to bring your number with you. My move from O2 to Three took less than 24 hours though it might take a few weeks. Just ask for a PAC number, which you can get just by texting your network.

Don’t pay for more data than you’ll actually use

One of the biggest ways we waste money on our mobiles is via upselling, and now the networks are all about getting us to pay for more data than we need.

When I recently got a new contract with Three, the sales person said “It’s only £3 more for 20GB”. Sounds good. Except I didn’t need 20GB. I didn’t really need the 8GB I have, but that was bizarrely cheaper than the 4GB option.

And I see this upselling all the time. There are always a number of promotions offering unlimited data at what looks like fantastic prices. But you really don’t need unlimited data, so however good the price, you’re still overpaying.

Most of you will be fine with 4GB, perhaps less, and it’s easy to check your usage history. I’ve written here about how you can work out exactly how much data you need.

Compare prices and cashback

Just as you would with your gas or broadband, it’s important to see what other networks are offering. MoneySupermarket or BillMonitor are decent price comparison sites, though they don’t include all the SIM-only networks.

Make sure you also check retailers such as Carphone Warehouse too as they often have their own deals.

If you’re switching network or upgrading without a new handset there’s less of a chance for cashback, but it’s worth checking anyway. Try both Topcashback and Quidco. I recently got £40 back from Three on an 8GB a month deal when Becky also switched over. And if you’ve never used cashback sites don’t forget the new member bonuses to get even more back!

Factor in the extras and freebies

I wouldn’t recommend choosing a new phone network based purely on extras, but if prices are similar it’s worth seeing what you can get.

The reason I chose first Three over GiffGaff was they let you use your inclusive data, texts and minutes abroad in countries such as the USA rather than just Europe, which saved me a fortune on our honeymoon. The next year I switched to BT Mobile as I didn’t need this worldwide roaming, but I later went back to Three for this feature ahead of another trip to the States. To me, it’s worth potentially paying a quid or so more a month for (though as it happens my current deal is hard to beat).

Out of all the loyalty schemes, only Vodafone seems to be worth it nowadays. O2 Priority rarely offers anything decent, while Three’s Wuntu closed in 2019.

Call your network to see if they’ll negotiate

It’s still worth calling your network to see if they can match or beat the total savings you’ll find from the tips above. It helps to do some research first so you know what you can get if you switch. Then ask to be put through to the ‘terminations’ or ‘disconnection’ team as they’ll usually have more sway. You can even do this over live chat if you prefer.

I’ve done this the last three years with Three. First I got by 4GB of data knocked down from £12 to £10 a month, then I got the data doubled to 8GB, and just last month that 8GB deal reduced to £8 a month. None of these deals were available on the Three website, but came from saying I wanted my PAC.


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