Money Advice Service

It’s time to get smart with your smartphone - why pay more than you need on your monthly mobile bill?

Contracts for the latest iPhone can top an eye-watering £90 a month. But if you hang on to your old handset, you can find SIM-only deals for less than a tenner. That’s a difference of more than a grand a year!

Big tip

A pay-as-you-go phone doesn’t require a credit check, so could be good if your credit record isn’t great.

What should you do with your extra money? Now that you’ve saved a few quid, we’ve a few ideas that will get you saving. Try them out here.

How long it’ll take: Put away a morning

Equipment needed:

    • Mobile bills or username and password, for your mobile account, to check your usage
    • Internet access, to check for the best deals
    • Phone, to haggle with your current provider

1. Treat yourself to the right tariff

Most people pay well over the odds for their mobile, because their tariff doesn’t quite fit. Either they’re paying for way more minutes, texts and data than they use, or paying through the nose every time they go over their allowances.

Think Goldilocks: you need a tariff that’s not too big, not too small, but just right!

Seven out of 10 people could save £222 a year by switching to a mobile phone contract that better suits their needs according to the CMA.

2. Hang on to your handset

The handset makes the biggest difference to your bill. If you’re happy with your handset, or can buy one separately, slash your bill by switching to a SIM-only deal. It’ll be way cheaper than a contract that comes with a new phone.

Check with your supplier if your contract has ended already or find out when it will. Make a note in your diary when will end so you know when you can switch without potential fees.

3. Haggle, and then haggle some more

If you’re at or near the end of your current contract, you’re in a powerful position. Don’t keep paying for a handset you’ve already paid for. Ring your provider. Tell them you want to leave. Get through to the retention or disconnections department (that bit is important as they are the ones with the power).

Chances are they’ll offer you a better deal on your allowances, payment, handset or even all three. Cut just a tenner a month, save £120 a year!

Nervous about haggling? has a guide on how to do it like a pro.

Don’t be fooled by “free” phones - Paying over a long contract is usually more expensive than buying a handset at the start. Compare the total cost by adding up any upfront fee, plus all the monthly payments. Then check if it’s cheaper to buy your own phone, and get a tariff that doesn’t include a handset – a comparison site can help you with this.

Run the numbers - To get the right tariff, check what you actually use in terms of texts, minutes and data. Three choices:

  • Pore over your mobile bills for the last three months. Tot up every text, call and bit of data, and calculate the average for a month. Then have a lie down in a darkened room.
  • Ask your provider
  • Let a price comparison website like Billmonitor, HandsetExpert or analyse your bills – AND match up the best deals to suit your circumstances.

Pick how you pay - Now you need to choose whether to pay-as-you-go, pay monthly or take a Sim-only deal.

With pay-as-you-go, you only pay for what you actually use. You pay in advance and are fancy free with no contract. Great for budgeting, cheaper if you don’t use your phone much, but you risk running out of credit.

With a traditional contract, you pay a monthly fee for a handset and a certain amount of calls, text and data. It spreads out the cost of the handset, but could cost more in the long term.

With a Sim-only deal, you need your own handset, and just pay a fee for your calls, texts and data. The contracts can be as short as 30 days, rather than two to three years with a handset contract.

Switch network, not number - You can still hang onto your phone number, even if you change network. Just ask your old mobile company for the PAC (porting authorisation code), so you can give it to the new one.

Consider mobile phone coverage – Network coverage is an important aspect when purchasing a new mobile phone contract. Poor coverage could mean that you miss phone calls and your text messages could be delayed, not to mention poor speeds when trying to use the internet.

The Ofcom website has links to coverage checkers for all the main suppliers.

This article is provided by the Money Advice Service.