SIM only vs pay monthly - what’s the difference?

If your contract's coming to an end, or you're eligible to upgrade, the main thing to decide is whether you want another mobile phone contract or a SIM only deal.

One comes with a new handset, the other will let you keep your current phone for a much lower monthly price. So whether you want a more recent phone, or you're looking to save some money, here's what you should consider.

SIM only vs mobile contract: which should I choose?

Here are the main things to keep in mind when it comes to deciding between a mobile pay monthly contract or a SIM only plan.

What is a pay monthly plan?

First things first - even though SIM only plans are also charged on a monthly basis, 'pay monthly' usually refers to a mobile phone & SIM contract. Since you'd be paying off your handset on a monthly basis, compared to no handset charge at all if you opt for SIM only.

When you sign up to a pay monthly plan, you generally commit for either 12 or 24 months. During this time, you’re committed to paying a set amount of money every month until the contract is paid off.

This fee will change depending on what you get with your contract. You’ll usually receive a set amount of calls, texts and data, as well as a phone. But your cost mainly depends on how expensive your chosen phone is.

For instance, the iPhone 15 Pro currently costs £999 without a contract. But you can get your hands on one if you sign up to a pay monthly plan for less.

If you choose a phone that doesn’t cost as much, the contract will usually have a lower monthly cost. The latest iPhone SE is a relative bargain with its retail price of £429. But of course, for most of us, that’s still a significant amount of money. On a pay monthly plan, you can get the iPhone SE for as little as £20 a month.

What is a SIM only plan?

A SIM only plan does what it says on the tin: you get a SIM card with no handset included. So it’s perfect if you already have a phone you’re happy to use. And since you’re not spreading out the cost of a handset, you can get a SIM only plan for a lot less than pay monthly plans.

While you still pay for your SIM only plan every month, it differs from a contract in the sense that there’s no long-term commitment. In most cases, you can change or even get out of your chosen SIM only plan after just 30 days.

And since there’s no long-term commitment, there’s usually no need for an in-depth credit check, which makes SIM only a really good option for quickly getting your hands on a decent plan with no fuss or commitment.

Switching to SIM only is also a great way of cutting down your costs if you were previously on a pay monthly plan. If you’re happy to keep your handset, once your contract is up there’s no need to keep paying the same rate.