A pay monthly contract typically lasts about two years. But with new phones and better deals coming out all the time, it can feel like a while to wait if you're a big fan of using the latest handsets.
So, when you start getting serious phone envy, upgrading early is tempting, as opposed to putting up with a phone that no longer feels valued for money.
Also, with mobile contract prices increasing by as much as 17% in 2023, you may be tempted to cancel your current contract and find a cheaper deal.
Unfortunately, if you cancel your contract, you’ll probably have to pay an early termination fee.
This applies to price rises, too, as most networks include them in their T&Cs. Due to the increase, you won't be able to cancel early for free.
Typically, this early exit fee means paying off the remainder of your contract in one lump sum, which is a lot to cough up in one go, particularly if you then want to splash out on a newer handset.
How to cancel your phone contract
To begin, contact your provider and select the option for cancellations. If you're within the 14-day cooling-off period, have 30 days left on your contract, or your monthly fee has been raised beyond inflation, you can cancel without extra charges.
If you're cancelling for other reasons, your provider will inform you of any remaining balance and how to settle it. They may also try to retain you by offering incentives like an early upgrade or gifts. Whether these offers are worth staying for is entirely up to you.
When you can leave your phone contract without paying penalties
| Within 30 days of your contract ending | As your contract nears its conclusion, you can leave without fees by giving 30 days' notice. You may receive retention offers, but you're free to explore other deals. |
| Within the first 14 days (if signed online or by phone) | Under distance selling regulations, there's a 14-day cooling-off period where you can cancel without penalty. You’ll only need to pay for any usage charges. |
| If the phone is faulty | Typically, you have 30 days to return a faulty device for a replacement or refund. |
| If your network raises prices | Unless inflationary increases are clearly specified in your contract, networks must notify you 30 days in advance of price hikes. You can cancel during this notice period. This doesn’t apply if you're moving from an introductory offer to the standard monthly payment. |
| If you experience poor signal quality (more complex) | You can use the 14-day cooling-off period if coverage is bad. If you relocate and experience poor signal, check if your contract includes an 'acceptable coverage guarantee.' If not, you can try to negotiate with your provider, though penalties may apply if they don’t allow you to leave. |
Alternatives to cancelling your contract early
Here are some of your options if you cannot cancel your mobile contract early for free.
1. If you want to upgrade your phone
You don't need to cancel your contract if you want to upgrade to a newer model. Most of the latest handsets are available to buy, unlocked and SIM-free.
SIM-free smartphones can cost a bit more upfront, but buying a new handset is a hassle-free way to upgrade your phone and can be much cheaper than paying the early exit fee.
You won’t need to sign a new contract; you can even recycle your old handset to recoup some of the cost.
2. If your phone breaks
Most phones are covered under a standard warranty for pay-per-month customers. So, if your phone starts to malfunction, check to see if it’s covered.
If it’s not, most networks offer repair services, but these can be expensive.
If the handset is the problem, try contacting the manufacturer directly. Apple is famous for its excellent customer service, and you can make an appointment at your local Apple Store.
Alternatively, if your phone is water-damaged, check out our guide on how to fix it yourself.
3. If you’re struggling with poor coverage
If you’re starting to experience issues with your network coverage, contact your network provider. They will check for any maintenance works or upgrades that could be causing you temporary problems.
They may also be able to suggest a solution or offer you a discount on your bill.
If you’re still getting poor coverage, check to see if you can use Wi-Fi calling.
4. If you’re leaving the UK
Unfortunately, if you cancel your contract because you’re moving abroad, you’ll almost certainly have to pay the termination fee.
It might be cheaper to leave your account open, particularly if you plan to return to the UK.
5. If you can’t afford your contract anymore
If you’re struggling to pay your contract - especially after the latest round of mobile price rises - get in touch with your mobile network to discuss alternative payment options.
If you cancel your contract without paying, the network will probably pass your contact details on to a debt collection agency, which could also affect your credit rating.
How to cancel your contract with each provider
If you cancel your contract, some networks discount termination fees.
Here’s what each network offers:
EE
EE’s early exit fee is calculated at 96% of your remaining monthly payments.
EE also offers an annual upgrade scheme to customers on higher data plans.
giffgaff
The beauty of giffgaff is that you don’t get tied into a contract, so you won’t have to pay an early termination fee. Simply change your goody bag or cancel it at any time. It’s as simple as that.
If you’ve bought a handset from the giffgaff phone store, you can continue paying for this on a separate agreement. You don’t have to use giffgaff to have this handset repayment plan.
O2
O2 Refresh is an upgrade program that lets you pay for your usage and your handset on 2 separate contracts. This basically means that you can upgrade your phone anytime you want.
It will probably cost you a bit more than a single package, but O2’s recycle plan could earn you as much as £260 off your next phone. So, if you’re the kind of person who regularly updates their handset, it could be a smart move.
Three
If you're on Three, you’ll have to pay an early termination fee equivalent to 97% of your remaining monthly payments.
However, if you have previously upgraded or renewed a contract on Three, your fee is discounted to 90% of your remaining monthly payments.
Vodafone
Vodafone offers a 30-day network guarantee, so if you want to cancel your contract within the first month, you shouldn’t have to pay a termination fee.
If you cancel after the first 30 days, you will have to pay a termination fee.
Remember that your handset remains Vodafone's property until you’ve paid the first six bills.
If you want to switch, check out all our latest mobile phone deals, including some seriously affordable SIM-only deals that could save you a lot over the year.
How to keep your mobile number when switching providers
To keep your current phone number when switching providers, contact your current mobile network and request a PAC (Porting Authorisation Code). You'll need to give this code to your new provider, who will handle the number transfer.
You can obtain the PAC by texting your network or calling them directly. Be aware that most providers require 30 days' notice before you switch, but the process is free and simple to complete. For more details, check out our full guide on transferring your number to a new phone.
