SIM-only or phone contract: which is cheaper?
A phone contract spreads the cost of a new phone over 24 or 36 months and includes your calls, texts and data. With SIM-only you buy the phone separately and pay a lower monthly price just for the airtime. Which is cheaper depends on the phone and the deals on offer.
How to compare the two
- Find the total cost of the phone contract: upfront cost plus the monthly cost for every month. Our deal lists show this for every deal.
- Find the price of the phone bought outright (SIM-free), from the manufacturer or a retailer.
- Add the cost of a SIM-only plan with similar data over the same number of months.
- The lower of the two totals is the cheaper option. Remember to include any price rises in both.
When a phone contract makes sense
- You don’t want to pay several hundred pounds for a phone in one go.
- The network is offering a discount or extras (such as streaming subscriptions) that you would pay for anyway.
- You want one bill for the phone and the airtime.
When SIM-only makes sense
- You can afford to buy the phone outright, or you are keeping your current phone.
- You want the freedom to switch network without waiting for a contract to end. Many SIM-only plans run month to month.
- You are buying a cheaper or older phone, where contract deals often cost more in total than buying it outright.
After your contract ends
Phone contracts usually split the cost into the phone and the airtime. Once the phone is paid off, check what you are paying: your provider must tell you when your contract is ending and what its best deals are. Moving to a SIM-only plan at that point usually saves money.
Frequently asked questions
Is it cheaper to buy a phone outright?
Often, yes, once you add a SIM-only plan, but not always. Networks sometimes discount phones on contract. Compare the total cost of the contract with the phone’s outright price plus a SIM-only plan over the same months.
Do I need a credit check for SIM-only?
Most monthly SIM-only plans involve a credit check, but it is usually easier to pass than for a phone contract because no credit is given for a phone. Pay as you go SIMs don’t need a credit check.
Can I use a SIM-only deal with my current phone?
Yes, as long as the phone is unlocked or locked to the same network. Most phones sold in the UK are now unlocked.