Contract phones

With so many varieties of mobile phone contracts available, it can be a daunting task to find the one that’s right for you. If you’re looking for the best phone deals and an understanding of mobile phone contracts, here’s what to keep an eye out for.

What is a mobile phone contract?

First things first, you should know precisely what a contract is. A vital part of any pay monthly phone deal, a phone contract outlines the terms of sale of your phone and your data plan. So, if you purchased a phone on a 24-month contract, that means you have agreed to pay a monthly fee for the phone and your data over a period of two years. You cannot break the contract without incurring a penalty, so it’s really important to pick the right one.

Phone contracts: breaking it down

You’ll see phone contracts offered in two halves:

  • Upfront cost: the price you pay on the day, ie, at the online check-out or in-store

  • Monthly cost: the ongoing price you pay every month via direct debit

In some cases, your upfront cost can be £0, or as little as a few pounds. In other cases, it may be much higher than your monthly fee, or your upfront and monthly cost might work out about even. Different things will determine these costs, including:

  • The model of phone

  • The memory capacity of your chosen phone model

  • The data plan you choose

  • Any extras you add (entertainment or accessories, for example)

  • The length of your contract

  • Phone contract lengths

Nowadays, mobile phone contracts are usually 24 months in length, with 36-month options also widely available. In some cases, however, you can have real flexibility on the length, but that will depend on where you buy (more on that below). 

Mobile contracts by network

Every notable phone supplier will offer ‘pay monthly phones’ on pay monthly deals (some smaller suppliers will only offer pay monthly SIMs), so you can compare mobile contracts from every supplier as you look for the best deals. Of course, that means these suppliers need to make themselves stand out from the competition. So while all contracts are generally the same, you might want to get that phone contract comparison chart out and start to compare phone contracts see if there a few handy extras depending on your chosen supplier:

Vodafone phone contracts

  • 24-month contracts

  • Wide range of data options including unlimited

  • Free security software trial

  • Choice of added entertainment apps

  • International minutes available

  • 5G

  • Easy add-ons

  • VeryMe Rewards perks 

  • Wi-Fi calling

  • Extensive free roaming destinations

  • 14-day cooling-off period

Vodafone is one of the largest network providers around, so you’re in safe hands if you do choose this network. An extensive roaming network reflects Vodafone’s international nature, with free-to-roam European destinations and more than 100 global locations that receive roaming coverage for a small daily fee. This is something that hasn’t changed since Brexit, but do keep an eye out for this in the future and it’s always worth asking the roaming question, especially now the UK is out of the EU.

Contracts are 24 months long and compared to other suppliers, Vodafone isn’t very flexible on this front. However, bolt-ons let you add in more minutes, texts or international calls whenever you want.

O2 phone contracts

  • Build your own plan 

  • Pre-set O2 plans

  • Entertainment deals

  • Large roaming network

  • O2 priority access/perks

  • Split monthly costs (handset/air time)

  • 5G

  • O2 recycle

  • Easy bolt-ons 

  • 14-day cooling-off period

O2 offers great flexibility, allowing you to essentially build your own plan. The exact limits on these plans will vary from phone to phone, but you can expect options similar to:

  • Any length between 3-36 months 

  • Any upfront cost from £0 to £600

  • Any data amount from 1GB to unlimited

Of course, the way you customise your plan will impact the monthly cost. For example, a 3-month plan for a new iPhone will have a huge monthly cost, unless you choose to set your upfront cost to the maximum to bring your monthly costs back down. Essentially, this flexibility lets you find the perfect balance to suit your current budget, your monthly budget and your data needs. For example, as of February 2021 a new iPhone 12 on a 3-month contract where you pay £500 up front will cost you 147.34 a month, with 90GB of data. Which is pretty pricey!

You may find O2’s pre-built plans are not only perfectly sufficient but better value too. You can also add a bolt-on to your plan for an extra boost in minutes, texts or data whenever you need. But as O2 charges airtime and handsets separately, you also have the freedom to change your data allowance every month. Other bonuses include O2 priority access which lets you book tickets before general sale and gives you perks at O2 venues.

Three phone contracts

  • Device finance options

  • 24-month plans

  • Go Roam destinations

  • 5G

  • Add in accessories

  • Customer perks like free minutes

  • Easy plan changes 

  • Unlimited entertainment app use with Go Binge

  • 14-day cooling-off period

Three contracts are 24 months in length. You can take advantage of Go Binge which lets you use apps such as Netflix, Soundcloud, Snapchat and Deezer (on your own previously paid for account) without using any data. Go Roam lets you enjoy roaming for free throughout Europe and for a small daily fee in other destinations. 

Device finance lets you spread the cost of your phone over 36 months – they work in the same way as a 36-month phone plan, except that your data SIM is only 24 months, as per Three’s normal plan. The advantage of this plan is that your handset has a whole extra 12 months of interest-free payments, so you’ll have smaller payments each month compared to a 24-month plan. 

EE phone contracts

  • 24 month plans

  • Annual MOT

  • Service packs

  • Wi-Fi calling

  • Data gifting

  • Swappable benefits

  • EE lifetime guarantee

  • Fastest 4G in the UK

  • 5G

  • 14-day cooling-off period

EE phone contracts are 24 months in length. You’re able to change your plan once every 30 days, so long as the adjustment is to increase your data limit. You can’t shorten the plan and your contract length will not change. 

EE benefits include an annual MOT and a guarantee on your phone for the length of your contract. Swappable benefits let you enjoy little extras like free data for gaming, Apple Music access and Amazon Prime Video, which you can change when you want to try something new. You can add your own data cap to stop yourself going beyond your data limit and, depending on your plan, you can also upgrade at any time. 

How much data do I need on my phone contract?

Some people automatically opt for unlimited to give them peace of mind, though if you spend some time calculating precisely how much data you use, you might be able to make great savings. Here’s a rough guide on what you can achieve with certain data allowances:

  • 4GB: basic use, no more than 3 hours of browsing a day, usually connect to W-iFi

  • 10GB: often streaming music and messaging apps, not streaming HD videos

  • 20GB: streaming lots of video every day

  • 50GB+: Heavy streaming and app use every day, lots of social media use 

As you can see, unless you are only using your phone data, never tapping into home broadband, work Wi-Fi or public Wi-Fi, you may struggle to get through 50GB of data. And with some providers letting you giving you data-free access to entertainment and gaming depending on your plan, you could even opt for an even smaller data limit. 

Always make sure you’ve fully researched not just possible plans and providers, but also taken a close look at your own usage and needs. If you’re really not sure, go for the smaller figure. Providers will happily let you upgrade your plan to get more data, but they won’t let you downgrade. 

Paying for a phone contract

You’ll need a debit card to pay for your phone contract. There’s no other way to pay for a phone on a monthly contract. Unfortunately, if you don’t have a debit card or a current account, it’s not possible for you to get a phone contract. It’s worth remembering that you’ll also need a healthy credit score to go for the more expensive phone deals.

Can I get a mobile phone contract with bad credit?

Yes, but it may be challenging. If you think you might have a bad credit score, you should always check it first. You can use online tools like Experian to do this. If you find your score is very low, then opt for a cheaper phone. 

You may not end up with the model you were hoping for or the data package you’d prefer, but consider it a stepping stone. If you can keep up with these smaller payments, your score will improve, and in the future, you can go for more premium phone deals.

I’ve been rejected for a phone contract – what can I do?

Fortunately, pay as you go makes it possible for you to get your hands on a phone no matter what. You might need to settle for the cheapest phone deal available, although you should bear in mind that most modern phones are very good pieces of kit regardless of price. 

Pay as you go phones can be as cheap as £10 (though we’ve even seen cheaper) and require a minimum top-up of £10. That’s a new phone ready to go for just £20 upfront. In a more general sense, you should take steps to improve your credit score, including getting on the electoral roll and setting up a current account. 

Alternatively, if you’re in desperate need of a phone, try using an old unlocked handset and find a SIM-only deal that gives you the most of your money.

Recognising the best phone deals

If you’re looking to compare phone deals, keep in mind all of the above and weigh up not just monthly costs, but also upfront costs and any extras that give you plenty of added value. For example, O2’s 36-month might seem a very long time, but you’ll be able to get your hands on the latest phone for a cost that does minimal damage to your monthly budget compared to purchasing it outright. This length of time does mean you are stuck with the same handset for a long while, though, so do choose carefully.

Frequently asked questions

Do pay as you go phones have contracts?

No, the handset on pay as you go (PAYG) phones will not have a contract. You’ll purchase the device outright, so you’ll never need to make any more payments towards the device itself. Usually, you will need to purchase a SIM card with your PAYG phone. Pay as you go SIMs will not have a contract but pay monthly SIM cards do. However, these are much easier to exit than handset contracts.

Do PAYG phones need a debit card?

No, you can buy these phones in-store using cash and then top up with a voucher purchased from supermarkets, corner shops and post offices, also paid for in cash. 

What is the cheapest phone contract?

Cheap phone deals offer basic handsets from lesser-known brands, like Alcatel, IMO and Doro. That said, all these brands have a strong position in the market for meeting other customer needs. Doro, for example, is designed for ease of use for elderly customers. But you don’t need to settle for an extremely basic phone. If you choose the lowest data option, you can get some fantastic handsets for an affordable monthly price. 

Do I need a phone contract?

No, there are plenty of PAYG mobiles that will let you own a phone and use it as you please. However, if you want to get the latest model, you may only be able to do so on a pay monthly plan as it breaks payment down into manageable monthly payments, making them some of the best phone deals for those models.

Can I give someone else my phone contract?

This depends. Some providers will let you change the name on your phone contract, but the new owner will be subject to their own credit check and there may be additional fees to pay. If it’s a matter of switching your phone contract to the name of a family member, it might be better to just arrange for them to pay you back for the phone’s cost each month rather than facing any extra admin fees. 

Can I have a contract on a SIM card?

Yes, providers offer pay monthly SIM cards, which means you can use your SIM with any unlocked device and your monthly bill will be for your data use alone. SIM-only contracts vary in length and can be purchased for mobile broadband alone if you need to connect with a tablet rather than a phone.