You’ll pay roughly £50-70 a month for the latest mobile phone model, with a ‘decent’ amount of internet, unlimited minutes, and unlimited text messages. There’s usually an upfront cost, and this will depend on the size and design of the handset. This upfront cost can be as much as £300. The latest models are more expensive than their older cousins, and larger storage devices also come with higher upfronts. In short, if you want the latest handset, hoping for no upfront costs will leave you sorely disappointed.
If your mobile phone contract costs you £70 a month, and you paid £100 for it upfront, you’re actually paying £1,680 for your phone and usage over a two-year period. And that’s if you don’t go over on anything, or make non-inclusive phone calls.
A Different Angle …
If you were to buy the handset outright, you’d be talking £300-£800, depending on size and model. You then OWN this phone. You can do what you like with it, including getting it unlocked.
You could shop around for the cheapest O2 mobile deals with an unlocked phone, and you could also search for cheaper deals on other networks. This is often a “sim only” contract, lasting for 30 days, right up to 12 months. This contract gives you just the sim and phone number, along with calls, texts, and internet within a plan. You don’t get a handset. Being a sim only contract with no phone, there are no upfront costs.
The same contract — unlimited minutes and texts, plus a set amount of data — would cost you about £20-£30 on a sim only contract (we looked at O2 mobile deals), without the handset. Yes, you would have paid a higher amount for the handset right at the beginning, but over a longer period of time, the sim only contract would actually work out a lot cheaper.
If you paid £600 for the handset and then £25 a month (for example), you’d only be paying £1,200 over the course of two years. You’d be saving yourself around £400-£500
Further Smart Savings
There are more ways that you can bag yourself a better mobile phone deal. Start by looking at how much of your inclusive stuff you use. What’s the point in paying for 10GB of data when you’re actually using only a fraction of that, say 2GB? If you look at the difference in monthly cost between the two data amounts, you’ll find that it’s £10-£20, depending on the rest of the package. (Again, we looked at O2 mobile deals.)
If you look at the number of calls and texts you send too, you may find that you don’t need the unlimited packages. That £50-£70 package that you were originally paying with a handset for two years, reduced to about £20 or £30 on a sim only deal, could cost considerably less when you work out your usage — down to £10 or £15, cutting your bill in half every month once again.
We’re urged to buy insurance when we take out mobile phone contracts but, just like two-year contracts, adding insurance at the point of sale isn’t always the best option. This insurance can cost £15 or more for the more expensive, premium handsets, every month. Some bank accounts include free phone insurance. You should check if yours is one of them.
As a final note, don’t forget to check your home insurance, etc. You may find that your phone is covered by that too.
Although a sim only deal with no upfront costs may not suit everyone, especially with the actual purchase cost of whatever handset you intend to use, it can work in a lot of cases. This is definitely if you want to save a few quid each month. A second-hand phone, or even a refurbished phone, could offer further savings on your handset cost, and being able to shop around every 12 months (or shorter), rather than being locked-in for two years, definitely gives you the advantage. You can switch to a cheaper provider whenever you find one.