Contract, SIM only or buy outright?
A phone contract spreads the cost of a new phone over 24 months but usually costs more overall. Buying the phone outright and adding a SIM only plan is often cheaper, and keeping your current phone on SIM only is the cheapest of all. The way to choose is to add up the total you’ll pay over two years, including any yearly price rise.
By the billsqueeze team · Facts checked: 24 October 2026 · Updated:
- A contract spreads the phone’s cost, but you usually pay more in total than buying outright.
- Buying outright + SIM only is often cheaper over 24 months, and you own the phone from day one.
- Keeping your phone on SIM only is the cheapest option. SIM only starts from £6.00 a month on SMARTY today.
- Compare by total cost over 24 months, including the upfront price and any yearly rise.
The three ways to get a phone
A phone contract bundles the handset and your airtime into one monthly bill, usually for 24 months. With SIM only you pay just for calls, texts and data, and either buy the phone outright or keep the one you have. All three can make sense; what matters is the total you pay over the time you keep the phone.
| Phone contract | Buy outright + SIM only | Keep your phone + SIM only | |
|---|---|---|---|
| Upfront | Often £0 to £100 | Full price of the phone | £0 |
| Monthly | Highest: phone + airtime | Low: airtime only | Low: airtime only |
| Credit check | Yes | Only if you pay by credit or finance | Not on most 30-day plans |
| Locked in | 24 months, sometimes 36 | 30 days to 24 months, your choice | 30 days to 24 months, your choice |
| Yearly price rise | Usually, set in £ | None on giffgaff, SMARTY, Lebara, VOXI | None on giffgaff, SMARTY, Lebara, VOXI |
| Best for | Spreading the cost of a new phone | Lowest total cost over two years | Phones that still work well |
Work out the total cost
Add everything you’ll pay over 24 months, then compare like for like:
- Contract: upfront cost + (monthly price × 24) + any yearly rises.
- Outright + SIM only: phone price + (SIM only price × 24).
Example (illustrative prices, not a live deal): a phone that costs £799 to buy outright.
In this example buying outright saves £101 over two years, and you own the phone from day one. The gap grows if you keep the phone longer, because a contract price doesn’t always drop when the handset is paid off.
When a contract makes sense
- You can’t or don’t want to pay several hundred pounds upfront.
- The network is running a deal with a big discount or trade-in bonus on the phone you want.
- You want a big data allowance and extras like streaming bundled in.
Choose a contract where the phone and airtime are on separate agreements (for example O2 Refresh or Vodafone EVO). When the phone is paid off, that part of your bill ends.
When SIM only makes sense
- Your current phone still works well: keeping it is the cheapest option of all.
- You can buy the phone outright, or with an interest-free deal elsewhere.
- You want to avoid yearly price rises and long contracts. giffgaff, SMARTY, Lebara and VOXI don’t raise prices mid-contract, and 30-day plans let you leave at any time.
- You’d rather avoid a credit check. Most 30-day SIM only plans don’t need one.
Things to check before you sign
- Price rises: since 17 January 2025, any rise must be written into your contract in pounds and pence. See every April price rise.
- Contract end: your network must tell you 10 to 40 days before your contract ends. If you bought a phone on a bundled plan, switching to SIM only then usually cuts your bill. See contract ended?
- Unlocked phone: phones sold in the UK since December 2021 come unlocked, so a phone you buy outright works on any network.
- Buying protection: paying for a phone costing £100 to £30,000 by credit card gives you extra protection under section 75 of the Consumer Credit Act.
See what you’d pay both ways
Compare phone deals by total cost, or find a SIM only plan for the phone you have.
Common questions
Is it cheaper to buy a phone outright?
Usually, yes. Buying outright and adding a SIM only plan often costs less over 24 months than a phone contract, but it depends on the deal, so compare totals.
Is SIM only cheaper than a contract?
SIM only is much cheaper each month because you’re not paying off a phone. If you already have a phone that works well, it’s the cheapest way to stay connected.
Do I need a credit check for SIM only?
Not for most 30-day SIM only plans. Phone contracts and 12- or 24-month plans usually need one.
Will a phone bought outright work on any network?
Yes. Phones sold in the UK since December 2021 are sold unlocked, so they work with any network’s SIM.