Taking out a new phone contract can be expensive, particularly with top of the range phones, with a high monthly fee that you will be tied to for the course of 18 or even 24 months. Perhaps you are happy with paying £30 or £40 a month now, but what if a few months down the line you are unable to afford this expenditure? The contract is a legally binding agreement and trying to break out of it early will result in you having to pay the full amount up front, as well as a possible termination charge.
For a long time the only other alternative was Pay as You Go. This can be a lot cheaper as you can choose if and when you add credit to your phone. At the same time though, phone calls and messages are a lot more expensive than they would be with a contract, meaning that a PAYG phone could cost you more or even result in you not being able to use your phone much at all – rendering it almost pointless for anything other than receiving calls.
Nowadays though there is a third option – SIM only deals. These work in a similar manner to a contract, but they come without a handset. You pay a monthly charge just as you would do with a contract although this can much cheaper, as low as £5 per month for a similar amount of calls, texts and data that would cost you significantly more through a normal contract.
The reason for this is that a lot of networks will pay for the cost of phones through higher monthly charges, and as there is no phone involved in a SIM only contract there is no phone that needs paying for, resulting in lower monthly charges. This does of course mean that you will need a phone to go with the SIM only contract.
You could buy one of the latest high end smartphones, but without a contract these could cost you in excess of £500. This is quite a lot of money to shell out and also defeats the point of trying to save money with a SIM only deal. You can of course buy a much cheaper phone, with many excellent smartphones now available for less than £100. You could also just purchase a £10-£20 simple handset, or use a phone that you already own. This is the flexibility of a SIM only deal, as you can use it in any phone you like provided that it is not locked to a different network.
One of the greatest features of SIM only deals that make them so much more attractive than standard contracts is that they can be cancelled at any point. You could pick up a SIM only contract and cancel it after the first month if it is not to your liking. A similar deal for a standard contract would keep you tied in for 12, 18, or 24 months without the freedom to change. SIM only deals are cheaper and much more flexible.
SIM only deals are now offered by all major UK networks including Vodafone, O2, Orange, T-Mobile, Virgin and Three. They are also offered by some smaller networks that can offer great SIM only deals of their own. If you would like more freedom to make calls, send messages or use the web on your phone than is provided by PAYG, and also want to avoid getting tied into a lengthy contract, then picking up a SIM only deal may be the ideal option for your next phone.
One place you can find SIM only deals in the UK is at Best-mobile-contracts.co.uk.
Image: Flickr.com/warrenski
Thomas is a professional writer and mobile phone enthusiast who works for 
