How you use your phone will have a massive bearing on the contract your go for and how much you pay. You will need to consider how many calls and texts you make, how much data you use and what sort of deal you are on now.
The first thing to look at is whether you are currently on a pay-as-you-go deal or a monthly contract.
A pay-as-you-go deal will mean that you:
Do not pay a set monthly amount; instead you top up your phone with credit as and when you need it
Do not have a package that includes a fixed number of calls and/or texts per month; instead you make as many calls and/or texts as you like and simply pay for it accordingly
Pay-as-you-go tends to suit those who are not heavy mobile phone users and perhaps only send a few texts or make a few calls per month, or those that own a mobile phone as a 'just in case' measure.
A monthly contract will mean that you:
Pay a fixed amount every month that includes a certain combination of inclusive calls, texts and data
Do not need to top up your phone with credit
Contracts tend to suit those who use their mobile phone frequently for sending texts, calling other mobiles and landlines, or browsing the net. This will probably work out much cheaper than if you paid individually for every call you make or text you send and it also often means that you get a new phone thrown in for 'free'.
If you are on a contract, at this point you should also find out how long that contract lasts and how much of it you still have to serve out. If you are on a 12-month contract for example, and are 4 months into that, you still have 8 months to see out before you can switch.
You should also find out what benefits, if any, you are getting from your current contract or pay-as-you-go deal. For example, you might be allowed unlimited texts to a certain number of friends in your phone-book, or discounted calls to those on the same network as you.
If you are not sure exactly what you are getting from your mobile phone deal, contact your network provider to check. You should find out:
How many minutes are included as part of your deal
Whether these can be used to call landlines and any other phone network, or whether you are restricted to same-network only calls
Whether you can only make calls within the UK or whether International minutes are included too
Whether you can pick up voicemail messages for free
The cost of any calls not included in your contract
How many texts are included
How many picture messages are included
The cost of texts over your allowance
Whether your package includes a data allowance & how much this is
Once you know what you are getting from your current contract you need to find out exactly what you are paying each month.
If you are current deal is costing you a lot it could be because you are regularly going over your usage limits.
Think carefully about what you use, for example, do you send lots of texts but only occasionally call or vice versa? Do you use your phone for browsing the internet, playing games, and do you ever make calls abroad?
Work out your usage by looking at your mobile phone statement if you are on a contract. If you are on pay-as-you-go, check your account. Look at how many texts you send and what kind of calls you make.
You should then be able to build up a picture of your regular usage and know exactly what you usually spend money on when it comes to your mobile, and what you really need from your contract.
Before you start searching around for deals, it is worth considering whether or not a mobile contract is right for you.
Signing up to a mobile contract will usually save you money in the long run, especially if you use your phone a lot.
You will get a brand-new phone without paying up front, as the cost of the phone is split across your contract term.
Peace of mind of knowing that you can use your phone any time without worrying if you have enough credit to cover a call.
You will need to pay a fixed monthly fee for the phone without fail for the contract period and wait till the end of your contract to switch to a better deal or get a new phone.
You can end up paying considerably more for your 'free' mobile phone over the term of the contract than if you had simply bought it outright and gone for a SIM-only deal.
If you like the idea of getting some cash back from your mobile contract, this may be the option for you.
These contracts offer a certain amount of money back during the term of the contract. Usually you'll be given set dates or periods when you can claim some cash back.
When shopping around for deals deduct the cashback from the cost of the contract and only go for this type of deal if it works out cheaper overall.
This is the main alternative to taking out a mobile contract, and basically means you top your phone up with cash if and when you need it. This option offers great flexibility for the occasional phone user, but can be much more expensive if you use your phone often. For more information read our guide How to Make Pay-As-You-Go Phones Work for You.
If you do not need a new phone with your contract, a SIM-only deal is a great option as the monthly payments can be much lower than a standard mobile contract.
This is because the cost of the new phone doesn't have to be factored into how much you pay, you are simply being charged for the cost of your texts, calls, surfing and so on.
However, you shouldn't rule it out as if you find a highly competitive SIM-only deal you could still end up saving if you pay for the new phone separately.
A SIM-only plan is unlikely to be the best option if you like to have the latest handsets and keep abreast of technology.
A big part of choosing the right mobile contract will be the phone handset you want. Different providers offer different models, so your options may be limited if you have your heart set on a particular phone.
If you do not want or need a new handset, it is definitely worth considering a SIM-only deal or pay-as-you-go and use your current phone.
If you are unsure ask yourself these questions:
Do I need a new mobile or will my existing phone suffice?
Is there a particular phone that I like and if so, are there any alternatives that I could consider for the right deal?
What functionality do I want my phone to have?
What do I want my phone to look like, i.e. colour of the handset, size of the screen, touch-screen, design of the handset etc?
If you know the handset you want then start looking at what tariffs are available. Use your usage information to single out the tariffs that offer the minutes, texts and data you need.
The best place to start your search is by going directly through the mobile providers. The four big mobile players, Three, EE, Vodafone and O2 are a good place to start but do not neglect the smaller networks like Tesco Mobile or Giffgaff.
If a network provider does not offer the phone you have set your heart then you can discount them from your search, but it might be worth looking at a similar alternative so you do not miss out on a great deal.
These will probably offer similar call plans and phones to the networks themselves. However, they are also likely to run other special offers and deals that could help you to save, so they are well worth a look.
However, there is a catch; if you take out a contract or get a pay-as-you-go phone from one of these stores you will be buying from the shop itself, not from the network (i.e. EE) or from the phone manufacturer (i.e. Samsung).
Once you have found the right deal and phone, it is worth seeing if you can get it for less! If you have found a cheaper deal but are still in your current fixed term contract, have a read of our guide, Can You Break Your Mobile Contract Mid-Term?
If you see a deal that does everything you need it to, but the price is a little higher than you would like it is worth trying to see if you can persuade the provider to drop the price.
Our guide Should You Haggle with Your Mobile Phone Provider? Explains what you will need to do.
If you want to switch networks, but keep your existing handset you may need to unlock it so that it can be used with another network. If you are unsure how to go about unlocking your phone, our guide How To Unlock Your Mobile Phone tells you everything you will need to know.
When you purchase your new mobile contract you will almost certainly be offered mobile phone insurance. This is definitely something worth considering as mobiles are easily lost or damaged and they are not cheap to replace!
Check out our guide How to Find Cheap Mobile Phone Insurance for everything you will need to know to get the right cover.
You may have cover for your mobile as part of your home insurance so it is worth checking before you get mobile insurance cover.
If you have signed up to the perfect mobile contract and got your hands on a shiny new handset, why not get a bit of extra cash for your old phone?
You might be surprised by how much you can get from phone recycling companies, especially if you have a relatively new handset to get rid of.
VoIP, which stands for Voice over Internet Protocol, is a method of communication that allows you to speak to people either locally or internationally over your internet connection.
Rather than using up your monthly minutes, you can speak to friends and family through VoIP enabled apps, such as Skype, which also gives you the option of talking face-to-face (with the help of the camera on your phone).
This could save you a bundle, especially if you plan to talk to anyone who lives abroad.