When it comes to mobile phone contracts, you don’t want to pay more than necessary. Finding a fantastic value phone deal can make an enormous difference to your monthly outgoings. However, it can also be overwhelming given the number of choices.
In the UK, the two main options for phone deals are contract deals or SIM-only deals. You can choose from a multitude of plans under each of these types, depending on:
- Whether you want a new handset.
- How many calls you make.
- How many calling minutes you need.
- How much data you consume.
Many people opt for long-term contract deals since it provides a way to purchase the latest mobile device and spread the cost in monthly instalments across the term of the contract.
What if you don’t care about owning the latest technology or you are happy with your current handset?
If having the latest iPhone in your pocket isn't high on your list of priorities, a SIM-only deal can be a fantastic choice. In this guide, we will answer the most common questions about SIM-only plans and look at why you might consider getting one.
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How Do SIM-Only Deals Work?
A SIM-only deal is a type of phone contract that exclusively covers your mobile services. SIM-only plans work like a regular contract and give you an allowance of texting, data and calls to use per month. You choose a plan, place your SIM card into an existing handset you own, and you’re all set.
Mobile networks typically offer SIM-only deals on either on a Pay-As-You-Go (PAYG) or a Pay-Monthly (PAYM) basis.
On a PAYM plan, you pay your chosen mobile network for your monthly allowance. It pays to know how many minutes, texts, and how much data you typically use, so you can buy the most appropriate plan. You will be able to find this information in your handset's usage data, which is usually in your settings. Alternatively, if you call your current network provider, they can tell you your usage patterns.
In contrast, on a PAYG plan, you need to top up your phone credit as and when you run out.
It is also worth checking whether your provider allows you to roll over your unused minutes, texts and data to the following month, or if your allowance ever expires. For example, some mobile networks that offer PAYM deals allow you to roll over your data, usually up to a certain number of months at a time. However, some mobile networks' PAYG plans state that your allowance expires after a specific time. For example, if you top up £10 but don't use your allowances within the stated number of days, you'll lose your credit and will need to top up again.
How Do SIM-Only Deals Differ from Contract Deals?
The main differences between SIM-only deals and a traditional contract relate to the cost, the length of the commitment you make, and the flexibility you have if you wish to change providers.
What do SIM-Only Deals Cost?
The cost of your SIM-only plan will depend on the minutes, texts, and data allowances you choose. All you pay for under this type of deal is the use of the SIM-card and your usage allowances. Some mobile networks may also provide incentives or bundle deals with SIM-only plans.
The pricing of a SIM-only plan differs from a traditional contract deal, where your monthly bill includes the cost of buying the device. As you’re not paying for a £1,000 smartphone on top of your usage allowances, your monthly bill will be significantly cheaper.
You can either buy a new handset separately or use your current handset to start using your plan.
How Long are the Contracts on SIM-Only Deals?
If you want to have the latest smartphone in your pocket, you will usually need to commit to a contract of at least 24 months. Given the high cost of modern smartphones, many mobile networks now offer 36-month deals, so the price of the phone itself is more affordable.
SIM-only deals are more flexible.
With a SIM-only deal, you can choose either a rolling 30 day or a 12-month plan. Some providers even allow you to go onto a SIM-only plan without entering a contract at all, allowing you to switch between providers whenever you like. However, you should check the terms and conditions of any such deal, as often a “no contract” SIM is a 30-day plan under a different name.
You will usually get a cheaper deal in return for committing to the mobile network if you go for a 12-month plan.
You Will Usually Have Some Flexibility
Depending on the SIM-only plan you choose, you may have the flexibility to swap networks and plans as often as you like. However, specific networks and even some plans will lock your phone, so it's worth checking before making a decision. Uswitch has a useful guide, including each networks' policies around whether they lock phones, here.
What Are the Benefits of SIM-Only Deals?
There are several potential benefits in choosing a SIM-only deal.
- Lower Monthly Outgoings. With a SIM-only deal, you're only paying for your usage allowances, and not the cost of a smartphone, significantly reducing your monthly expenses.
- Shorter Term Contracts. With 30-day or 12-month options, SIM-only deals mean you don’t need to commit to a network – or a handset! – for 24 or even 36 months.
- Easier Credit Check. It will usually be easier to pass a credit check for a SIM-only deal than a traditional contract. Since the network provider does not include the cost of an expensive handset in your agreement, you are a lower-risk borrower and have a better chance of getting approved. If you opt for a PAYG deal, you won’t be subject to a credit check at all!
- Increased Flexibility. The shorter duration of SIM-only contracts may make it easier for you to swap networks.
What are the Potential Drawbacks of SIM-Only Deals?
While SIM-only deals have lots of positives, there are some potential drawbacks to be aware of, too.
- You Could be Missing out on Offers: Some providers offer exclusive deals and plans that only apply to contract deals that include a handset. You could be missing out on the best rates by opting for a SIM-only plan.
- Can Be Expensive: If you are planning on buying a new handset to accompany the SIM card, some models can be quite expensive.
- May Not Work With Current Device: If your current phone is locked to another provider, you might have to ask your old one to unlock it for you to start using a new SIM.
- Cancellation Fees: You may need to pay up the rest of your contract and other fees if you switch providers before your deal ends.
When deciding between a SIM-only versus a contract deal, you need to think about whether you value flexibility or having the latest technology more and make your decision accordingly.
What is the Best SIM Only Deal for Me?
Your specific needs and phone usage should guide your decision. The beauty of it is that irrespective of your choice, the flexibility that this type of deal provides makes it easy to switch. Feel free to take a chance on a provider and change later, if they are not for you. With this in mind, it is worth opting for a 30-day or no contract SIM-only deal until you find a provider with whom you are satisfied. You can then commit to a longer-term deal to reduce the cost of your plan.