A report by research group Billmonitor found that consumers are throwing nearly £5 billion a year down the drain by signing up for the wrong contracts. The group analysed more than 28,000 bills and discovered that three-quarters of mobile phone users, equivalent to around 25 million people, are paying for tariffs they don’t make full use of, with most people over-estimating how many minutes they spend on the phone. Some are paying for four times as many minutes as they actually use each month.

The main reason people go for plans that give them larger call allowances than they need is so they can avoid steep charges for exceeding their free minutes, but in many cases they are left with hundreds of unused minutes a month.

Here, we explain how to find the right tariff for you, so that you don’t end up paying more than you need to...

Work out how you use your phone

When choosing a call plan, most of us just plump for the number of free minutes which sounds right, without checking how many we actually use. Try to keep a rough tally of the number of minutes you use each day for a week, then multiply this by four at the end of the week to give yourself an idea of how many inclusive minutes you might need each month. Make a note of the times of day you tend to make most of your calls too. You should also keep a record of the number of texts you make, and the amount of time you spend on the internet via your mobile.

Another option is to contact your network provider and ask them about your usage – or you can check your latest statement.

Check your tariff

Once you’ve worked out how you use your phone, check your current tariff to see if it is suitable for your needs. While it is advisable to have a buffer of a few extra inclusive minutes in place, having an hours more than you will ever use means you will be paying much more than you need to.

Ask your network provider if they can move you to a more appropriate deal and how much you can save. Before accepting their offer, use moneysupermarket.com’s mobile phone comparison service to check the deals available from other providers – if you find a better tariff then see if your existing supplier will agree to match it. If not, then you should switch.  Remember, however, that if you are tied into a contract, then there is likely to be a penalty for moving, so you might be better off waiting until your current deal is up before switching.

You can search for a new deal on moneysupermarket.com either by looking for the latest handsets and seeing the tariffs that go with them, or you can search by brand, or browse a range of incentives.

Pick up a freebie

Many mobile phone deals offer free gifts, ranging from the Apple iPod Touch, a Samsung 50” TV, a Nintendo Wii and a range of lap-tops. For example, if you sign up to a 24 month contract with T-Mobile which comes with a Nokia 1616 phone through affordablemobiles.co.uk via moneysupermarket.com’s mobile comparison service, you will get 300 inclusive minutes and unlimited texts every month as well as a free Nintendo 3DS. This deal comes with nine months free line rental by redemption, so the cost per month is £12.76. However, don’t be tempted to go for the wrong deal just to get the freebie though, as this will defeat the point of moving.

Keep your number

Lots of people are put off switching to a different network because they think they will lose their number. However, provided you let the new network know you want to keep your existing number, and that number is still active, then this is usually possible, although you should find out if your current provider charges for the release of a number.

You will need to ask your current provider for a nine digit Porting Authorisation Code (PAC) which has to be given to your new provider. Under new rules introduced by Ofcom this week, once requested, the PAC must be given over the phone or by text message within two hours. It is then valid for 30 days. Once you have been through a credit check with your new provider, you should be able to transfer your number over.

Remember – every month you are on the wrong tariff is another month you are paying more than you need to for your mobile, so check as soon as possible that you’re on the right deal.

Please note: Any rates or deals mentioned in this article were available at the time of writing.