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How to choose a mobile phone deal

01 September 2015 ( 12 March 2020 )

Know your options when buying a mobile phone with our guide to help you decide whether to choose a contract, pay-as-you-go or SIM-only deal. Plus top tips to help you choose the mobile phone deal that's right for you.

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Compare the cost of the different contracts versus the flexibility of owning your phone outright

Before you can make an informed decision about the best way to buy a mobile phone, you need to know what your options are and what the differences are between them.

On a basic level, you have three choices:

* You can purchase your phone on a contract and be tied to a service provider for the duration of the contract.

* You can use your existing mobile phone handset or purchase one outright, and then buy a SIM card-only contract from your choice of service provider.

* You can purchase a phone outright (or use an existing phone) and choose a pay-as-you-go service.

When you purchase a phone on a contract, the initial price you pay for the phone will be far lower – or it might even be ‘free’. Of course, you will still be paying for your phone, but payments will be made over the course of the contract period (usually 12 to 24 months).

If you already have a mobile phone or choose to buy one outright, you can then purchase a SIM card from the service provider of your choice. The advantage of this is that you won’t be locked into a long-term contract, and you can keep your phone number if you transfer to another service provider.

Your contract can be as short as 30 days, and you can choose to be billed at a set rate each month or choose a pay-as-you-go (PAYG) service.

PAYG means you’ll pay for calls, texts and data in advance but you’re not locked into a fixed amount and can stop the service whenever you want.

Buying a phone outright is like buying any other product. It’s yours to keep and you can shop around for the best deals from service providers. You will have to pay retail price for your phone, though.

If you want one of the latest high-end smartphones, it may be prohibitively expensive.

What is the best mobile phone deal for me?

It can be tempting to accept a contract deal when you’re offered the latest model for free or at a hugely reduced price.

However, you need to think about the terms of the contract before you decide whether a contract deal is best for you. Ask yourself:

* Can you afford the monthly payments?

* Will you use your mobile phone enough to justify the monthly expense?

* Can you afford to pay the excess if you don’t keep track of your service usage?

Contract deals are best for frequent users of mobile phones, since the cost of the services you use may be discounted. This makes them the cheapest option for those who make a large number of calls and texts a month.

However, the monthly charges are higher and you’re locked into them for the contract period. And you have to pay a hefty penalty rate if you opt out of the contract.

SIM cards are inexpensive and – even if you decide to accept a longer contract period – are cheaper than contracts you enter into when you buy the phone as well.

PAYG deals are best for those who rarely use their mobile phones, and only use them for basic services. If you don’t make many calls or send many texts, and don’t access emails or use the internet, PAYG could save you quite a bit of money.

Think long term when choosing a mobile phone. Will the best deal today still be the best deal over the next couple of years? Compare the cost of the different contracts versus the flexibility of owning your phone outright.

The best deal for you will be the mobile phone that costs you the least over time, not the phone that costs less today, but more tomorrow. So choose wisely.

Tips to help you choose the best mobile phone deals

Getting the best mobile deal can be daunting with thousands of tariffs on the market. You need to decide on the mobile phone handset you want, how much talk time you need, how many texts, data usage, roaming, if you want pay-as-you-go or a monthly contract - the list is never ending.

With an estimated 83 million mobile phone contracts in the UK and rising, there are loads of tariffs and a lot of people searching for an affordable mobile phone deal.

Choose a mobile phone handset that's right for you

The main thing to decide when taking out a mobile phone contract is which handset to choose. For those who want the latest Android phone or iPhone, be prepared to pay up to £50 a month for a tariff with unlimited calls and texts, even when the phone comes free.

Do some online research about mobile phone contracts

Try the Ofcom-approved website Its 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. Remember that many contracts these days tie you in for two years. Also check out for updates on the latest deals across all the popular handsets.

While you have the handset you want in the beginning, later on in the contract this can mean owning an outdated or battered looking device. It also means you can’t switch if a better deal comes along.

This is why some people might choose pay-as-you go, which also allows you to track how much you’re spending.

Haggle for a cheaper mobile phone deal

If you are approaching the end of your contract and would prefer to stay with your existing provider, contact them to see if they are prepared to offer you a better deal.

Even better, come armed with examples of rock bottom-priced deals from a rival network and see if your existing one will match it.

Choose SIM-only mobile phones

Many customers routinely continue paying the same monthly tariff even after their contract has ended and they have paid off their phone. And that is a good time to drop down to a cheaper SIM-only deal, if you are happy to stick with your existing handset.

Just remember: if it breaks, you are responsible for replacing it. And if you take up another contract you will have to honour the SIM-only deal until that runs out too.

Get cashback on a new mobile phone deal

If you choose a new contract, buy through cashback websites such as or You can make some very tidy money-back sums from these sites.

And don’t forget: Sell your old phone if you are changing your handset. We’re spoiled for choice these days with a whole host of services offered by websites such as, and

The newer the phone, the more money you get – so don’t leave it gathering dust in a drawer.


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.