Some 90% of PAYG customers are happy with their phone payments, compared to just 63 per cent of those on monthly contracts, according to TopCashback.co.uk
Those on PAYG contracts spend an average of £5-£10 a month, with around three-quarters believing they have the best deal on the market, compared to just 63 per cent of those on monthly contracts.
There are drawbacks and benefits to both. The attraction of PAYG is very low monthly costs. But if you want the latest handset, it’s going to cost you dear. If you want the iPhone 5S as part of a deal with network EE, for example, it will cost an eye-watering £519.99.
Contract phones largely remain the most competitive for regular users who want the latest handsets. A contract with EE means this same handset would be £69.99 – yet ongoing costs are £35.99 a month which gets you unlimited minutes and texts as well as 2GB of data. But many people resent having to sign up for long contracts that these days are typically 24-months for the best deals.
While you have the handset you want in the beginning, later on in the contract this can mean owning an outdated version or simply a rather worn and weathered device. It also means you can't switch if a better deal comes along.
PAYG customers can easily track how much they’re spending. And if you’re on a very tight budget you can opt for a cheaper handset – and simply hold back on texts and calls for as long as you need to.
Finding the best deal can be a minefield because everyone uses their phone differently and handset choice is a personal decision. Not to mention the hundreds of tariffs on the market.
If you are on a contract and think you are paying over the odds, there are a number of comparison websites you can use. Try Ofcom approved website www.billmonitor.com
The free Bill Check-Up service will analyse if you are over- or underusing your contract, when your contract ends, and which new tariff is right for you.
Equally, if you are spending more than you would like on PAYG see if a contract phone would be cheaper overall.
Have you switched?
Overall, a study by Gocompare.com revealed that just 23% of people have switched their mobile phone provider in the last 12 months.
More than half of those on monthly contracts have switched providers due to costs.
That still leaves many languishing on potentially over-priced deals. Many are forced to stay put as they are within their contract. Once it has ended you are free to pick a new deal.
Search a comparison site for the best tariff and see if your current provider will match the price if a rival firm is cheapest.
If not, switch!
If you have the handset you want, but need to reduce monthly outgoings, you could switch to a SIM only tariff. These can be in the form of a one-month rolling deal, or an entire year and they offer a good number of minutes, text messages and data, only without a phone.
Top deals according to uSwitch.com are from Virgin Mobile at £15 a month which gives you unlimited calls and texts with 2GB of data each month.
Alternatively Three offers a deal at £10 a month with 600 minutes of talk time, unlimited texts and 1GB of data. If you need more internet usage than anything else, a deal from giffgaff at £12 a month gives 3GB of data, with 500 minutes and unlimited texts.
The opinions expressed are those of the author and are not held by Saga unless specifically stated.
The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.