When your phone contract ends, you have a choice: sign up to another phone deal that bundles a new handset into a higher monthly payment, or switch to a SIM only plan and keep using your current phone at a much lower monthly cost. The right answer depends on whether you actually need a new phone — and whether the total cost of a contract stacks up against buying a device outright.
This guide compares both options with real current prices so you can make the calculation yourself.
If you already own a phone you are happy with, SIM only will almost always save you money — often significantly.
If you need a new phone, compare the total cost of a phone contract against buying the handset outright plus a SIM only plan. The cheaper option depends on the specific device and current deals — the worked example below uses live figures.
SIM only vs phone contract: at a glance
| Factor | SIM only | Phone contract |
|---|---|---|
| Upfront cost | None (30-day) or none (12-month) | Often £0–£100+ depending on device |
| Monthly cost | Lower — no handset repayment built in | Higher — includes handset financing |
| Contract flexibility | 30-day rolling — cancel any time | Typically 24 months, exit fees apply |
| Device ownership | You provide your own phone | Phone included, yours at end of term |
| Credit check | Not usually (30-day rolling plans) | Yes — handset financing requires one |
| Ability to upgrade | Upgrade phone and plan independently | Tied to contract end date for upgrades |
| Total cost (24 months) | Usually lower | Usually higher — includes device margin |
When a phone contract makes more sense
A phone contract can be the right choice if you need a new device but do not have the savings to buy one outright. Spreading the cost of a flagship phone — which can cost £800 to £1,200 at retail — into monthly payments makes it accessible without a large upfront outlay. This is particularly relevant for people who want the latest iPhone or Samsung Galaxy and would otherwise need to save for several months before purchasing.
Phone contracts also suit people who prefer the convenience of a single bill covering both their plan and their handset. If you want to upgrade to a new device every two years without thinking about reselling your old phone or managing separate purchases, a contract keeps things straightforward. Just compare the total cost over the full term — not just the headline monthly price.
When SIM only makes more sense
If you already own a phone in good working order, SIM only is almost always cheaper. There is no reason to pay a monthly premium for a handset you do not need. Switching to a 30-day rolling SIM only plan at the end of your contract typically saves between £10 and £30 per month — which adds up to £120 to £360 per year.
SIM only is also better for people who want flexibility. 30-day rolling contracts mean you can switch networks whenever a better deal appears, without paying exit fees. And because most SIM only plans from networks like giffgaff, Smarty and VOXI do not require a credit check, they are more accessible to people with limited or poor credit history.
Frequently asked questions
Can I get a SIM only deal and buy a phone separately?
Yes — and this is how many people save money. You buy the handset outright (new, refurbished, or second-hand) and take out a separate SIM only plan for data, calls and texts. The two contracts are completely independent, so you can switch networks whenever you like without affecting your device.
Is it cheaper to buy a phone outright?
Usually, yes — when you add up the total you pay over a 24-month phone contract, it is often higher than the retail price of the phone plus 24 months of a comparable SIM only plan. The difference is the implicit interest built into phone contract pricing. The gap varies by network and device, so it is worth calculating the total cost both ways before committing.
What happens to my phone contract if I switch to SIM only?
If you are still within a phone contract, leaving early will normally incur an early exit fee — typically the remaining monthly payments minus any discount the network applies. Once your contract ends, you are free to switch to SIM only at any time. Text PAC to 65075 to port your number across to a new network. Your existing handset remains yours to keep.
Do phone contracts include a credit check?
Yes. Because a phone contract involves borrowing — you are effectively financing the handset over 24 months — networks run a credit check before approving you. SIM only plans on 30-day rolling terms do not require a credit check, since there is no deferred payment involved. If you have poor credit, SIM only is usually more accessible.
Prices shown are pulled live from our database and update daily. We may earn commission when you click through — this never affects our editorial rankings or recommendations.