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

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We’re all more reliant on our mobile phones than ever before. So choosing the right tariff is really important.

Aside from choosing what type of phone is best for you, be it a top of the range smartphone or a scaled down basic handset, you’ll also need to figure out whether you want to sign up to a pay monthly contract or a SIM-only deal.

Pay monthly contracts and SIM only plans offer different benefits for different people, so depending on your circumstances you might prefer one over the other.

But which type is right for you? And what are the differences anyway? Let’s take a look.

What is a pay monthly plan?

Smartphone bill hero image

When you sign up to a pay monthly plan, aka a mobile phone contract, you generally sign up 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 differs 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. The phone that comes with the contract is usually the most expensive component of your monthly plan.

Since the latest smartphones can cost upwards of `£1,000, mobile phone networks make them more affordable by including handsets in their price plans, so you can spread the cost out over 1-2 years.

This certainly makes getting a brand new smartphone cheaper than buying it outright.

For instance, the iPhone 11 Pro costs £1,049 without a contract. But you can get your hands on one if you sign up to a pay monthly plan from around £50 a month.

Similarly, the latest Samsung smartphone, the Galaxy S20 Plus, retails for around £999. But on a pay monthly plan you can get this top of the range handset for around £50 a month.

And if you choose a phone that doesn’t cost as much as those two flagship devices, the contract will be even more affordable. The brand new iPhone SE is a relative bargain with its retail price of £419. 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 £19 a month.

Pay monthly plans also have other benefits. Since you’ll be signing up for a contractual payment plan, paying on time every month will be good for your credit score.

But on a similar note, signing up for a pay monthly plan means you will have to undergo a credit check, which may not be suitable for everyone. Also, despite spreading the cost out on a pricey phone, pay monthly contracts can still cost more than some wish to pay.

Perhaps your old handset is still working well and you don’t need a new phone.

Which leads us to your other option - SIM-only...

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.

In the past, networks have faced criticism for continuing to charge the same rate even though the contract is paid off. Your network is now obliged to let you know when your contract is running out so it’s recommended that you shop around. Switching over to SIM only can often see you having the same amount of data and call times for considerably less.

For instance, this SIM-only plan from Three offers 8GB of data for just £8 a month.

And if you want a big chunk of data this plan from Virgin Media comes with 36GB for just £13 a month.

So as you can see, there’s money to be saved with SIM-only. Bear in mind, if you do switch to SIM-only, you may need to unlock your handset. And if another handset comes along that you want to use, you’ll have to either buy it outright or sign up to a new pay monthly plan.

Dual SIM

Want the best of both worlds? Get a dual SIM device. You may be thinking, what’s the point of two SIM cards?

Well, with two SIM cards you can benefit from using two different networks. This can be really useful if you live in an area with signal issues. Or maybe you need a phone number for work and a separate one for your personal life.

Or maybe you travel a lot and prefer to have a phone for life at home and one for while you’re away. Either way, dual SIM is an option.

Decided that pay monthly is the best option? From cheapest pay monthly contracts to the latest smartphone deals, check out all our pay monthly plans here.

Or maybe you’re going for SIM only?

All SIM only deals

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