Over five million Brits have been issued a warning as they could be overpaying by around £351 each year more on their mobile phone contracts. The warning comes from the price comparison site uSwitch, which says millions of Brits are paying more for their phone handset than they should as they are out of contract. According to Ofcom data, a fifth of all handset customers (19%) are currently out of contract and are paying outdated prices that reflect the cost of paying back a phone, even though this "payback" period has been completed. uSwitch estimates that mobile phone providers are collectively cashing in an additional £1.77billion per year from out-of-contract customers.
The experts at uSwitch say customers need to be vigilant when it comes to their contracts, and one way they could save money is by switching to a SIM-only deal from their handset contract. To check, all mobile customers need to text the word "INFO" to 85075. After this, you will be sent information about your contract and when it is due to expire. If you are out of contract, you can switch to a different provider without having to pay an exit fee. uSwitch says that swapping to a SIM-only deal could help customers save £351 a year - or £29.25 per month.
Uswitch's mobile expert Ernest Doku says SIM-only deals can offer significant cost benefits. They typically have a lower monthly rate for more data and minutes since no handset is included. Ernest says they can also offer greater flexibility with shorter-term contracts, and many providers offer free EU roaming. Ernest added: "It’s important to remember that if your bundled phone contract includes a handset, you’re essentially ‘paying it off’ with your monthly phone bills. Once your initial contract ends, you’ve contractually finished paying off the phone. However, this won’t be reflected in your monthly payments, and you’ll continue to pay the same amount as before, if not more.
“If you already own a phone, switching to a SIM-only contract can save you a significant amount of money in the long run: they typically offer lower monthly rates since you’re not paying for a new phone. “If you’re still in contract remember to set a reminder for when your contract ends. Even seemingly small costs can add up over time, so it’s crucial to review your contract and make changes as needed. If you’re unsure whether you’re in contract or not, simply text “INFO” to 85075. If you do choose to switch providers, you can still keep your old mobile number. Just text “PAC” to 65075 for free and you will receive your PAC code. Once you receive the PAC code from this number, give it to your new provider and they will do the rest.”.
