Are you losing money on the wrong mobile phone contract?

When it comes to finding a mobile phone contract, the amount of choice can be overwhelming, and lots of us don’t shop around as much as we could. In fact, a 2017 study by Ofcom-accredited mobile comparison site HandsetExpert found that British mobile phone customers could save around £3.4 billion every year by finding a better deal.

Think you might be paying too much for your contract? Here are our top tips for saving money on your monthly phone bill.

Pay monthly vs SIM-only

Monthly contracts are the most popular type of mobile phone tariff, with 73% of the population choosing them over a SIM-only plan.However, in the majority of cases, switching to a SIM-only deal will reduce the total amount you spend on your phone.HandsetExpert’s study found that 88% of customers would be better off switching to SIM-only tariffs, with an average saving of £92 a year. Not too shabby!

So why do people choose pay monthly contracts?

Lots of people are attracted to pay monthly contracts by the promise of the latest handset, either free or for a low price, and regular upgrades.But if you do the maths, this usually ends up being a false economy. Over the length of your contract, you’re likely to spend more in total than if you’d purchased the handset outright and opted for a SIM-only deal.The high initial outlay may be off-putting but if you can afford the lump sum to buy a new phone SIM-free, you’ll almost certainly save money in the long run.If you can’t afford it in one go, an interest-free credit card could be an option. This would allow you to spread the cost over a number of months without paying any extra – as long as you pay off the full amount before the interest-free period ends.

How to save money on your next mobile phone deal

Before signing up for any new mobile phone contract, calculate your typical monthly usage to make sure you’re only paying for what you need. For example, if you mainly use your phone to make calls, you don’t want to spend extra for data you won’t use.

You can calculate your usage by looking at past phone bills to see how much of your allowance you typically use.

Whether you opt for pay monthly or SIM-only, consider this typical usage when searching for a new mobile phone deal to make sure you’re not paying more than you need to.

Think before you renew

If your contract is coming to an end, don’t rush to renew it. Most mobile network providers will encourage you to renew, perhaps with the offer of a new phone – but check your options first to see if you could save money.If you’re still happy with your current handset, you could save a lot of money with a SIM-only contract. If you’re looking to upgrade, use a price comparison website like HandsetExpert to make sure you get the best deal.