SIM only vs contract phone deals: Which one should I go for?

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Last updated: 31 March 2022

When choosing a new mobile phone contract, one of the first decisions you’ll need to make is whether to opt for a SIM only mobile phone deal or purchase a phone and contract together. It’s not always an easy decision to make, as each of these options have many pros and cons. In this guide we’ll be quickly running you through the options available, and then explaining why a SIM only deal may (or may not) be for you.

What is a SIM-only deal?

A SIM-only deal provides you with a packaged allowance of data, minutes, and text, all pre-loaded onto a SIM card. Unlike traditional pay monthly contracts, you don't get a handset with SIM only contracts, but this of course results in lower monthly costs.

More and more mobile network providers are beginning to offer unlimited data SIM only packages, but these will typically be their most expensive plans. If you're on a budget and looking for a cheap mobile deal, you may have to settle with a SIM only plan with data limits. However, like most pay monthly contracts, you will have the option to top up your data, calls, or minutes, for a small fee should you run out before the end of the month.

As you don't actually get a physical phone with a SIM only deal, these types of plan will suit those who are happy with their current handset and don't see a need to upgrade to the latest iPhone every year.

A SIM only plan could also be for you if you're after something flexible. Many SIM only deals are rolling monthly contracts, which means you're not tied in to a lengthy 12, 18, or 24-month contract, and you can usually cancel without charge with just 30 days' notice. Some mobile networks even allow you to upgrade or downgrade your package each month as you please.

Pros of SIM only:	Cons of SIM only:
Cheaper monthly costs	If you want a new phone, you must pay the full cost of the handset upfront
No lengthy contracts means you’re free to switch provider each month	You will need to unlock your phone if it’s not unlocked already
No need to buy a new phone	Less likely to get unlimited data
No hard credit checks needed

Is a SIM-only deal worth it?

Handsets are pricey – the cost of a phone on its own can roll into hundreds (and now thousands) of pounds, especially if you like your phones loaded up with features. A SIM only deal is usually worth it if you don’t need a new handset and you are happy with the minutes, texts and data included in the deal itself. So if you already have a phone that you like, consider a SIM only plan when looking for your next mobile phone contract.

It’s worth noting, however, that you might need to unlock your existing phone if it’s tied to a particular mobile network (usually the network of the first contract the phone was purchased with).

What is a monthly contract?

Traditional pay monthly contracts involve you paying a set amount each month for an allowance of data, minutes, and texts, but you also get a physical handset with it. As you're paying off the cost of your device as well as your monthly allowance, monthly contracts are invariably more expensive than SIM only plans.

You must be aware that should you want the latest model from top manufacturers Apple, Samsung, or Google, you will likely have an expensive bill each month. Some pay monthly contracts involve an upfront cost for the handset which can result in lower monthly payments, so look out for these. However, you should always work out the total cost of getting a particular phone over the length of any contract to see if it can actually save you money.

You should also look out for networks that separate the cost of the handset from that of your plan. With these types of package, your monthly payments will fall once you've paid off the cost of your device, while you also get the added benefit of clearer bills.

Monthly contracts will suit those who want to upgrade their phone every couple of years, or those who want large amounts of data to use each month. However, you will have to commit to lengthy contract that typically lasts between 12 to 24 months, and in some cases even longer.

Pros of monthly contracts:	Cons of monthly contracts:
Get a brand new mobile phone with your plan	More expensive monthly costs than SIM only plans
Spread the cost of an expensive handset	Lengthy contracts mean your tied to a particular provider, usually up to 24 months
Low upfront costs	You can get hit with unexpectedly high bills if you go over your allowance
You can upgrade your handset each time your contract comes to an end	Requires a credit check
You’ll never get cut off like with PAYG plans
Many networks offer rewards and free gifts as an incentive
Making payments on time can improve your credit rating

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What about pay as you go?

Another option to consider is pay as you go (PAYG) deals. With a pay as you go plan, you pay for your allowance of data, minutes, and texts in advance, and you must top up your credit when you run out in order to continue using your phone.

You don't have to commit to any contract with PAYG plans, so you're free to leave your network provider whenever you like. You also won't have to pass any credit checks to be eligible, which may be the case with some monthly contracts.

The downside to pay as you go deals is that you'll likely pay a lot more for for your data, minutes, and texts than you would do on a contract. You also don't get a handset, so you must be happy with the one you've already got (while it must also be unlocked) for you to benefit from this type of plan.

Pay as you go plans will suit those who don't use excessive amounts of data or make loads of calls, have a phone they're happy with, and don't want to be tied down to a local network. For more information on PAYG deals and whether they're right for you, check out our guide on mobile contracts vs pay as you go deals.