In the market for a new phone on a pay monthly contract? We've got you covered. Read on and we'll help you make an informed decision on what plan to get next.
What is a pay monthly phone?
The term 'pay monthly phone' refers to a phone bought on a contract, which you pay off in monthly instalments. As well as the handset itself, the contract will also include a monthly data allowance, as well as calls and texts.
Typically, a pay monthly phone contract lasts two years. At the end of the contract term, you own the phone outright.
How do pay monthly contracts work?
When you buy a pay monthly phone, you'll first need to pass a credit check. This will be carried out by the UK networks or retailer you’ve opted for. Whether you pass or fail will, of course, depend on your credit rating.
If you pass the credit check and are approved by the vendor, you then may have to pay a small amount upfront as a deposit.
Not all pay monthly contracts require you to pay a fee straight away – you may be able to find deals with no upfront cost. But if you're buying a phone that's just been released, it's likely that an upfront charge will apply.
When you sign up for pay monthly phone, you'll enter a contract with the network/retailer to debit a set fee each month. This will cover the cost of the phone, which you pay off in instalments, as well as your monthly allowance of data, calls and texts.
At the end of your contract term (which typically lasts for two years), you'll have paid off the cost of the phone in full.
Once you’ve reached the end of your contract, some networks will automatically put you on a rolling one-month SIM-only deal at a competitive price. As a result, your monthly outlay will go down because you’ll only be paying for your allowances.
However, other networks may only drop your payment a little bit, if at all. In which case you may still be paying more than you need to, until you take action and sign up for a new contract.
What are the pros and cons of pay monthly?
- You can spread your payments over two years
- You don't have to find a big lump sum to buy a phone – monthly payments can help make the cost more manageable
- You get better allowances for your money than pay-as-you-go
- Contract phones help you build your credit rating
- Unlike pay-as-you-go, you won't have to remember to top-up your credit
- You're tied in to a contract, usually for two years
- Works out to be more expensive in the long run than buying a phone SIM-free
- You'll almost certainly have to pass a credit check
- Not as flexible as pay-as-you-go or rolling monthly SIM plans
- If you miss your monthly payments, or pay late, your credit score may be negatively affected
Do you have to buy the phone upfront?
Some pay monthly phone contracts require you to pay an upfront charge for your handset. This will usually be anywhere between £30-£150.
However, this upfront charge usually only applies if you’re getting a newer, high-end smartphone. The rest of the cost of the phone is then spread over the course of your contract. If you don’t want to fork out a lump sum to buy a phone SIM-free and off-contract, it can be much more manageable to pay in monthly instalments instead.
And with cheaper phones, it’s unlikely that you’ll need to pay anything at all. You’ll be able to choose from a wide selection of handsets with no upfront cost.
How long are pay monthly phone contracts?
Standard pay monthly contracts last for 24 months, though if you look around you'll be able to find a smattering of 12 month contracts, too.
Due to sky-high prices for the latest top flagship phones, some networks now offer 36-month contracts, or even longer. These let you spread the cost of the phone over a lengthier period – which, for the highest-end phones that cost over £1,000, can be very handy.
Indeed, these longer-term contracts can sometimes allow you to buy a phone you wouldn’t have been able to afford outright or on a shorter-term deal. However, it's worth noting that you'll normally end up paying more over the course of three years than you would over two.
Is there a 14-day cooling-off period?
When you buy a pay monthly phone online or over the phone, you get a 14-day ‘cooling off’ period. This lets you cancel the contract for free, as long as you do so within 14 days of signing up to your contract.
However, if you've made use of your allowances in that time, you'll probably be charged for whatever you've used.
If you signed up for a pay monthly phone deal in person, a 14-day cooling-off period does not apply. However, it's still worth asking the network or retailer you signed up to – they may be able to make an exception, depending on your circumstances.
Choosing a network
When it comes to choosing a mobile network, there are a fair few things to think about. And the best network for you depends on your personal priorities, as well as your budget.
You might be looking for premium plans that come with extras or free gifts, or you might be more focused on competitive costs that won’t break the bank. Some networks provide faster speeds, while others have better 5G coverage across the UK.
To help you make up your mind, we’ll take a further look at the four biggest networks in the UK and outline their key selling points below.
- O2 Rewards offers an excellent range of incentives and freebies, including priority ticket-booking at O2 venues
- Decent 5G coverage and speeds
- Can customise your contract length anywhere between three months to 36 months
- Flexible plans, thanks to O2 Refresh – you can upgrade early, as well as change your data allowance every month
- International roaming is included
- One of the pricier networks around
- The flashy benefits are only good if you'll make use of them – if you’re not an avid gig-goer, O2 Priority might not be that useful to you
- Competitive prices, especially for a household-name network
- Great 5G speeds
- Wide selection of smartphones
- Can choose from 12-month, 24-month and 36-month contracts
- Benefits are lacking – though this is a trade-off you get with lower prices
- No more inclusive EU or worldwide roaming
- Speeds are slower than the likes of EE
- VeryMe rewards scheme offers plenty of discounts and treats
- Entertainment plans come with free subscriptions to streaming services like Spotify, YouTube Premium or Amazon Prime
- Decent 4G and 5G speeds
- You get a premium service, but at a premium price
- 5G coverage isn’t as wide-ranging as other networks
- The UK's fastest network for 5G and 4G
- Discounts available if you add EE broadband or TV to your bundle
- Good range of extras on select plans (such as Apple services, Netflix, BT Sport and Microsoft 365, among others)
- Flexible Smart Benefits include Apple Music, Prime Video and more
- Plans don't come cheap
- You’ll need to pay more to access extras and benefits
- No inclusive EU roaming – only available with more expensive plans
How do I find the best pay monthly phones?
Just use the filters to choose what's important to you, and we'll help you track down a deal that fits your needs.
What if I can’t pay my phone bill this month?
If you don’t pay your mobile phone contract, your account can go into arrears. As a result, your mobile phone might be disconnected, and you won’t be able to make or receive calls or use 4G.
Mobile phone bill arrears are considered to be ‘priority debts’, meaning you should try to sort it out as soon as possible. If you don’t take action to resolve the debt, your account will default and the mobile provider may take action to recover the outstanding bill (as per the normal debt collection process).
If you’re finding it difficult to pay your monthly phone bill on time, it’s best to get in touch with your phone network. Depending on your situation, they may be able to help you by arranging an alternative payment plan, giving you more time to pay, or allowing you to move to a cheaper package.
Can I get a pay monthly phone with bad credit?
If you have a bad credit score, it can be difficult to get approved for a pay monthly phone contract. This is because most networks will run a credit check on you when you sign up, so they can make sure you’ll make your monthly payments.
As a result, you may be rejected for a phone contract if your credit rating is too low. However, you may have a better chance of being accepted for a contract with an older, less expensive or refurbished phone. If you’re unsure of your chances, it’s worth getting in touch with the network to see if they’ll accept you.
Of course, if you have a bad credit rating, your best bet is to go for a 30-day SIM-only deal. Typically, these deals don't come with a credit check. You'll need to already own a handset, or else save up and buy one outright.
Our page on bad credit phones goes into more detail.
Which mobile networks provide unlocked pay monthly phones?
When you buy a handset from a network, it may be locked to that network – this means it’ll only work with the mobile provider that you bought it from.
Each network has different policies on providing locked phones. For example, EE and Vodafone’s pay monthly handsets are locked to their networks.
On the other hand, networks that provide unlocked pay monthly phones include: Three, Virgin Mobile, O2, Tesco Mobile and iD Mobile, among others (though exceptions may apply, depending on the device you’re getting).