How to cancel your phone contract early

Years ago, it was normal to leave a mobile phone contract or get an upgrade every 12 months on a 12-month contract.

Nowadays, however, if you're paying for a top-end handset, you'll probably be committed to a contract of two years or more. As flagship handsets are easily over the £1,000 mark, a long-term contract allows you to spread that cost over a longer period of time.

Of course, that’s good news for anyone who wants to avoid the steep upfront cost of an expensive phone. If you can’t afford to buy a device outright, paying it off in monthly instalments is a lot more manageable.

However, it also means that you’re tied to a contract for a long time – and if you want to get out early, you may have to pay an early exit fee.

So, what can you do if your circumstances change? For example, you might want to cancel your contract because:

• It’s too expensive
• You’ve found a better deal elsewhere
• You want to upgrade to another device
• You’ve moved house and found the signal isn’t as good
• You’re unhappy with your current network

Can you cancel your phone contract early?

There are certain scenarios in which you can cancel or change your phone contract early without having to pay a fee. Read on and we’ll explain…

If you’re within 30 days of the end of your contract

If you have a month or less left on your phone contract, then you can get out of it without having to pay any exit fees, as 30 days is the usual notice period for ending a deal.

Often, networks will contact you around this time to see if you want to upgrade a little early. You are, of course, well within your rights to say no and to look elsewhere for a different phone deal.

If you’re in the first 14 days

If you signed up for a new phone contract over the phone or online, you get what’s called a ‘cooling-off’ period, which typically lasts for 14 days.

So, if you change your mind during the cooling-off period, you can exit the contract without penalty – as long as it’s within those 14 days. Bear in mind that you may be charged for any calls you make, texts you send or data that you use.

However, if you buy a phone in person in a network’s shop or other mobile retailer, you are not entitled to the same 14-day cooling-off period.

If this is the case, it may be worth calling your provider to see if they’ll honour such a period anyway. Citizens’ Advice suggests asking as a ‘goodwill gesture’.

If your network changes their prices

Networks are entitled to raise their prices by the retail price index (RPI) rate of inflation, although some choose not to and make this explicit when you sign up.

If it raises its prices beyond this rate, it is legally obliged to give you 30 days’ notice, during which time you can cancel your contract.

However, this does not apply if the rate rises after an initial offer of three or six months at a lower rate expires, and you move onto a standard, monthly payment.

What if my signal is rubbish?

If you find your signal is not as advertised when you first take out your contract, and you’re still within your 14-day cooling-off period, then you may be entitled to cancellation (as long as you took out the deal online or on the phone).

However, if you move and find your signal isn’t good enough, things become a little trickier.

Your contract may contain an acceptable network coverage guarantee, which allows you to cancel if you regularly find yourself without a signal. This guarantee isn’t offered by every network, though, so you’ll need to check your contract.

Alternatively, you could move over to another network, who might pay off your remaining contract balance and any early termination fees. This isn’t always possible, however, and networks will have their own rules in place: for example, you may need to have been with your current network for a certain amount of time, or you might need to trade in your current device and buy a new one from your new network.

Be aware that cancelling a contract early can cost a significant amount, especially if there is no guarantee of coverage in your original deal.

What are the fees for cancelling a contract?

Cancellation fees vary between networks. However, you’re looking at paying between 90% and 97% of the entire remaining contract cost, depending on your provider.

Networks might have slightly different fees, but they’ll generally calculate your early termination charge by adding together any outstanding charges, then deducting VAT and 4% for early receipt of payment, before adding VAT back on to get the final amount.

One exception is O2. If you’re on an O2 Refresh contract, you’re actually on two contracts: one for your handset and one for your data, call and text allowances (called an airtime contract). This means you won’t have to pay any early termination charges for your airtime contract – however, if you haven’t paid off your device yet, you’ll need to pay it off in one lump sum.

Networks can often change their fees, so it’s always best to contact them to check how much you’ll have to pay.

How to cancel your phone contract

The first thing to do is call your provider and choose the ‘cancellation’ option when it comes up.

If you’re in your 14-day cooling off period, have 30 days left on your deal, or have had your monthly fee raised higher than inflation, then you can go about the process easily and without fear of having to pay for the privilege of cancelling your phone contract early.

If you simply want out, then your provider will lay out how much you owe and when it needs to be paid.

Alternatively, some may try and convince you to stay by offering an early upgrade or free gifts to entice you to sign for another period – whether that’s enough of an incentive to make you stay is up to you.

How to keep your mobile phone number when switching

Once you've decided to make the switch, you should be able to keep your existing number. To do this, you need to call your current mobile provider and ask for your PAC – that's a Pre-Authorisation Code – and give this to your new provider. They will then arrange the transfer of your number.

You can text your network to get your PAC, or call and ask for one. Read our complete guide on how to transfer your number to a new phone to get the full lowdown.

It’s quite likely that your current phone company will want 30 days’ notice of your intention to switch. Luckily, the switching process is free and straightforward to do.

Finding the right deal

If you’ve just escaped a pricey plan, you’ll want to make doubly sure that the next contract you sign up for is the right one for your needs and budget.

That’s where MoneySuperMarket can help. Visit our mobile phone page to compare all the latest phones and deals, including pay monthly phone contracts, pay-as-you-go and SIM-only.

You can even search by phone model, so you can shop around for deals on the exact phone you want.

For information on the best deals from UK mobile phone retailers check out our guides.

Finding the right deal