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What the networks don’t want you to know: 3.4 million mobile users could pay twice for the same handset

  • Almost a quarter (22%) of pay monthly mobile customers are paying the same monthly bill more than two years after signing up, meaning they’re out of contract and are overpaying for their handset

  • Almost a third (30%) of pay monthly mobile customers don’t know when their current contract is up for renewal – and are at risk of overpaying

  • Over a quarter (27%) of 18-34 year olds are confident, or fairly confident that their contract has already expired

  • Far from plotting their next money-saving move, 43% of pay monthly mobile customers haven’t considered changing to a better deal when their contract expires

  • Uswitch.com urges customers to check if they’re out of contract and, if so, consider the package that offers best value, from a handset upgrade to a change in provider / tariff or a move to SIM-only, that could save money.

Almost 3.4 million mobile phone owners could be forking out money each month for handsets that have already been paid off in full, according to new research by price comparison and switching service Uswitch.com.

In fact, more than four in 10 (44%) mobile users are signed up to pay monthly contracts with handsets included – where the handset is not paid for upfront but absorbed into the customer’s monthly bill. This rises to 55% among 18-34 year old mobile users.

However, when this contract ends and mobile users continue to pay their bill, they are in fact paying for a handset that has already been paid off. 66% haven’t made plans to move to a new deal when their contract runs out, whilst 16% are confident or fairly convinced that their contract has already expired, rising to 27% among 18-34 year olds.

When it comes to older users, 16% of over 55s have been languishing on the same pay monthly deal for more than three years and 33% have no idea when their contract is up for renewal.

With the most common phones on pay monthly deals including the iPhone 6s and the Samsung Galaxy S7, both of which typically cost more than £500 to buy outright, it’s clear to see why deals that include a handset are so popular. Indeed, almost half (48%) of pay monthly mobile customers said they could not have afforded to buy the handset they have outright if they had wanted to.

As it stands, the average time that has elapsed since mobile users’ contracts have expired is six months.  Uswitch.com urges pay monthly mobile customers to check when their current contract expires to avoid ‘double paying’. This means paying twice for the same handset when your contract is up. If you’re happy with your phone, switching to SIM-only (SIMO) – which can be teamed with your current handset – could be a thrifty option. Alternatively, a new pay monthly deal can give you access to a new tariff and a brand new handset.

Ernest Doku, telecoms expert at Uswitch.com, comments: “When it comes to pay monthly mobile contracts, the attractiveness of a ‘free’ phone is often hard to resist – the idea of being able to afford an expensive phone without paying upfront costs is undoubtedly appealing. The proof is in the virtual pudding, as 44% of mobile phone users have a ‘free’ phone included in their contract.

“Yet, this problem with ‘double paying’ for out-of-contract phones needs to be addressed. Pay monthly mobile users need to be aware of the exact contract length they’re signing up to. That way, they’ll know exactly when the handset they ‘bought’ will be paid off by.

“Some networks such as O2 and Tesco Mobile split bills separately: one for tariff and one for handset. This means handset bills can be reduced accordingly, giving peace of mind to the consumer. However, premium ‘Refresh’ contracts with regular handset upgrades can have a sting in the tail for those happy to hang onto their handset that bit longer. Paying ‘Refresh’ rates just for airtime and data instead of swapping to a straightforward SIMO and teaming it with your handset means you’ll likely be paying over the odds for that airtime and data.

“Pay monthly isn’t the only way to afford a brand-new phone. Buying a phone outright on an interest free credit card, and paying off the handset before the APR goes up, could be an alternative.

“But if you’re happy with your handset, a straightforward SIMO deal could well be the answer. From as little as £5 a month for a basic package through to a massive 20GB of 4G data for just £20 a month, when teamed with your current handset, this could be a financially achievable alternative to buying a new handset or signing up to a pay monthly deal – and it simultaneously addresses the risk of ‘double-paying’.

“It’s important to be conscious of when your contract runs out, so make sure you compare online to find the best deal for you – whether you stay with PAYM or switch to SIMO.”

Find out how you could save over £1,000 a year with Uswitch here.

FOR MORE INFORMATION

Claire Jones

Phone: 020 7148 4663

Email: Claire.Jones@uswitch.com

Twitter: @uswitchPR

Notes to editors

Uswitch.com surveyed a nationally representative sample of 2,002 UK adults aged 18+ via Opinium. Data was collected 3rd to 6th March 2017. Our results have been weighted to nationally representative criteria - all questions unless mentioned went to mobile users or those responsible or jointly responsible for choosing and paying for their mobile contract / provider.

  1. Respondents with a pay monthly contract were asked: "When did you sign up to your contract?". 10.6% responded 2-3 years ago, 11.7% responded more than three years ago. 10.6% + 11.7% = 22.3% of PAYM customers have been paying the same bill for more than two years.

  2. Respondents with a pay monthly contract were asked: "Do you know when your contract is up for renewal (to the nearest month)? 30% responded 'No'

  3. Respondents with a pay monthly contract were asked: "Bearing in mind that most pay monthly contracts are 24 months long, is there a chance that your contract has already ended?" 27% of 18-34 year olds responded 'Yes'

  4. Respondents with a pay monthly contract were asked: "Do you plan to move to a new deal as soon as your mobile contract runs out" 43% responded 'Haven't thought about it'

  5. More than 3.4 million mobile phone owners could be forking out money each month for handsets that have already been paid off in full: According to ONS, 93% of adults use a mobile phone in the UK. According to the ONS, the UK population estimate is: 51,339,000. According to Uswitch's survey, 44% of Brits with a phone, have a phone contract. 93% of 51,339,000 = 47,745,270 Brits with a phone. 44% of 47,745,270 = 20,772,293 Brits with a phone contract. Respondents with a pay monthly contract were asked: "Bearing in mind that most pay monthly contracts are 24 months long, is there a chance that your contract has already ended?" 16% responded 'Yes'. So, 16% of 20,772,293 = 3,386,528 Brits with potentially expired phone contracts (stayed on same contract for longer than 2 years).

  6. Respondents were asked: "What sort of mobile contract do you have?". 44% of respondents answered "Pay monthly, came with a phone included".

  7. Respondents were asked: "What sort of mobile contract do you have?". 55% of respondents aged 18-34 answered "Pay monthly, came with a phone included".

  8. Respondents with a pay monthly contract were asked: "Do you plan to move to a new deal as soon as your mobile contract runs out" 22% responded 'No' and 43% responded 'Haven't thought about it'. 22% + 43% = 65% of PAYM customers have no plans to move to a new deal once their contract has expired

  9. Respondents with a pay monthly contract were asked: "Bearing in mind that most pay monthly contracts are 24 months long, is there a chance that your contract has already ended?" 16% responded 'Yes'

  10. Respondents with a pay monthly contract were asked: "When did you sign up to your contract?" 16% of 55+ year olds responded more than 3 years ago

  11. Respondents with a pay monthly contract were asked: "Do you know when your contract is up for renewal (to the nearest month)? 33% of 55+ year olds responded 'No'

  12. With the most common phones among those on pay monthly deals being the iPhone 6s and the Samsung Galaxy S7 Respondents were asked: What mobile handset did your pay monthly deal come with? 15% of respondents answered: iPhone 6s and 12% answered Samsung Galaxy S7.

  13. According to apple.co.uk, the iPhone 6s is priced between £499-£599 (source: http://www.apple.com/uk/shop/buy-iphone/iphone6s). According to Samsung.co.uk, the Galaxy S7 is priced between £523.00-£597.00. Data collected on 13/03/17

  14. Respondents who got their phone as part of the contract were asked: "Thinking about when you signed up to your contract could you have afforded to pay for that handset outright if you had wanted to?" 48% of respondents answered 'No'.

  15. As it stands, the average time that has elapsed since mobile users’ contracts have expired is 6.1 months. Respondents were asked: "Do you know how long ago your current mobile contract may have expired?" The mean time length was 6.1 months.

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