Are you paying too much for your mobile?

Andy Webb

We’re a nation that loves mobile phones, with Ofcom reporting that 96 per cent of us have a handset—but I think many of you are overpaying. Here’s how to really bring down the cost, without sacrificing service

The problem with contracts

The most common way to get not just your phone, but also your minutes, texts and data, is to take out a contract with one of the networks. This spreads out the cost of your handset over two years or so, which might seem like no bad thing.

However, combined contracts rarely offer the best value. There’s not only likely to be a hidden premium attached to the package, but you could easily keep paying when your contract ends if you don’t switch to a new handset or cheaper contract. Around 1.5 million people are overpaying because of this.

 

Going SIM-only

There’s no requirement to get a new handset each time your contract is up. And if you are in need of an upgrade you don’t have to buy a new one from the network. So, the easy way to bring down your bill is to keep your existing phone and pay just for the service. This is known as going “SIM-only”.

If you’re out of contract, the simple option here is to call up your network and tell them you want to move to a SIM-only deal. If you’d been paying for a premium handset it can bring the monthly bill down by a shockingly large amount.

You have two choices with SIM-only. Pay-as-you-go SIMs need to be topped up by a certain amount, eg, a tenner, which runs out as you use the phone. These can be good if you don’t use your mobile much.

For most it’s better value to go for pay-monthly. This is a package of calls, texts and data for a monthly price. You can opt for a 30-day rolling contract, or sign up for a year or longer.

 

Get the same service for less

If that doesn’t cut the bills as much as you’d like, then it’s worth looking at switching. I understand why you might be reluctant—you want to make sure you get signal where you live and work, and moving to another network could jeopardise that. And you probably don’t want a new phone number. Both of these can be easily avoided, though.

First, let’s look at signal. You might be surprised to know that there are actually only four networks: O2, EE, Vodafone and Three. All other providers such as Giffgaff, BT Mobile and ID use the infrastructure of the main four. It’s often referred to as “piggybacking” and means you get exactly the same signal. For example, Giffgaff uses O2 and BT Mobile uses EE. Often these challenger brands are cheaper too, so it’s well worth considering a switch.

You can also move your existing phone number over. Simply ask your current network for a Product Authorisation Code, commonly known as a PAC. Let your new network know this code and they’ll do the rest. The number is normally transferred over the same or next working day. All you have to do is switch over the SIM card in your phone.

However, even if you’re out of contract, you might need to give a 30-day notice, so check the terms of your existing tariff before you sign up with a new network. You don’t want to end up paying twice.

 

Pay for what you actually need

Whether you’re sticking or switching network, it’s worth reviewing what you’re paying for. Take a look at your bills and see how many minutes you’re using, how many texts you’re sending and how much data you’re using. There’s a good chance you are paying for more than you use. Reduce your allowances and you’ll reduce your bill further.

Websites such as mobilephonechecker.co.uk will let you compare the different tariffs once you know what you need. You can also use the website checker.ofcom.org.uk to check coverage in your area. Enter a postcode and you’ll see a call and data availability for each of the four networks both indoors and outdoors.

 

Consider combining your mobile bill with other services

It’s worth looking at your other media services such as broadband or pay TV. Lots of companies, including Sky, BT and Virgin are offering discounts if you “bundle” all your services together. This could tie you into that provider, so if you’re planning to switch or cancel one of these, it might be better to avoid this option.

 

What if you need a new handset?

SIM-only is great if your phone itself is working fine. But if it’s on its last legs, or you just fancy an upgrade, what do you do?

The vast majority of the time it will work out cheaper to buy your handset on its own rather than as part of a contract. However, you should compare prices as there are sometimes decent special offers. If you do want to pay separately then this usually means a large upfront cost, especially for premium options such as iPhones. If you don’t have the cash available, you can look at 0% purchase credit cards to help spread the cost. Though make sure you cover the minimum monthly payments and are able to clear the whole balance before interest charges begin.

Alternatively, older models will be cheaper. Or you can buy refurbished handsets from networks and manufacturers which work just as well but cost a fair whack less.

Again, don’t pay for more than you need. There are lots of innovations which claim to improve how the handsets work, but if you only make calls you don’t need it to have facial recognition or a super camera.