There are three ways to end up with a new phone in your pocket: a pay-monthly contract that bundles the handset in, buying the phone outright and pairing it with a SIM-only plan, or a hybrid where a retailer splits the device and the airtime into two agreements. Retailers make each look as cheap as possible, and the trick they all use is the same — put the smallest number in the biggest font.
The only number that matters
To compare like with like, work out the total cost over the term and divide it by the number of months. We call that the effective monthly cost, and it is what every deal on this site is sorted by unless you choose otherwise.
Take two deals for the same phone. Deal A is £25 a month with £300 upfront over 24 months. Deal B is £36 a month with nothing upfront over 24 months. Deal A looks cheaper — it is £11 a month less. But over the term A costs £900 and B costs £864. B is the better deal, by £36. That is a small gap here, but on a flagship it is routinely £100 or more either way, and it is invisible if you only look at the monthly figure.
Where buying outright wins
A contract is, underneath, a loan for the phone plus an airtime plan. The airtime part of a contract is nearly always priced above what the same network sells as SIM-only, because that is where the margin is. So if you can afford the handset up front — or put it on a 0% credit card you will actually clear — buying outright and adding a cheap SIM usually comes out ahead over two years, sometimes by a lot.
It also leaves you free. There is no early-termination charge if you want to switch network, and when a better SIM deal comes along you can take it the same day.
Every phone page on this site shows the cheapest buy outright price we track underneath the contract deals, precisely so you can do this comparison without opening another tab.
Where a contract still makes sense
- You cannot or would rather not find several hundred pounds today.
- The retailer is heavily subsidising the handset to hit a sales target — it happens, especially just after a new model launches and the previous one needs shifting.
- The contract bundles something you would pay for anyway (a streaming subscription, a tablet) and you have priced that in honestly.
The hybrid: device plan plus airtime
Some networks, O2 most visibly, split the deal into a device plan (often 36 months) and an airtime plan (often 24 months). The advantage is that once the airtime term ends you can drop to a cheaper tariff while continuing to pay off the handset. The catch is that the two terms are different lengths, so the true total is not simply the monthly figure times 24. When we see this structure in a retailer's data we add both parts up separately, and the deal card tells you the two terms explicitly.
Three things to check before you commit
- Mid-contract price rises. Most contracts go up every spring. The increase is now shown in pounds and pence before you sign — read it.
- What the data allowance actually is. "Unlimited" plans sometimes have a fair-use policy or slow you down after a threshold; check the small print if you are a heavy user.
- Coverage where you actually are. National percentages hide local gaps. Check the network's own coverage map for your home, work and commute.
Ready to compare? Start with the phone you want, or if your current handset is fine, go straight to SIM-only plans.