Pay monthly vs SIM-only: which is right for you?

If you're thinking about getting a new phone or your current contract has ended, you have a decision to make: get a new contract or opt for a SIM-only deal.

So which is right for you? What's the difference between them? Here's a look at both options to help you decide.

Benefits of SIM-only deals

A SIM-only deal is where you already have a handset and you just buy the SIM card with a plan included. For example, it may come with 100 minutes, 1,000 texts, 1GB of data, etc.

There’s no phone included with a SIM-only deal – it’s designed to be used with an existing phone.

So why opt for this?

Firstly, the price is often better. When you buy a contract with a phone, your monthly contract covers the price of the handset. With a SIM-only deal, this isn’t the case, so the monthly price is typically lower.

If you already have a phone you're happy with and you don't want to upgrade, you're almost certain to get a better price with a SIM-only deal.

You can also look for a specific deal that matches your usage requirements. You know exactly how you use your phone, and if you want a deal with more minutes but you're not fussed about data, you can find this.

As a result, SIM-only deals are more flexible to your needs, so you don't have to go with a tariff you don't really want just for the phone.

There’s also no need to get a 24-month contract. Often you only need to commit to as little as one month, so you can change with greater frequency and take advantage of a better deal when it comes along.

Benefits of pay monthly deals

The major benefit of a pay monthly deal is that you get a phone as well, and this will either come free or for a discounted price depending on your contract.

The latest top handsets are expensive, and buying one would involve handing over a large lump sum. This might not be possible for some people, so a pay monthly deal makes it easier.

HandsetExpert has recently found that customers could be losing up to £92 through phone contracts, with around 88% of mobile users being better off by switching to a pay monthly deal.

It's a good option if you want the latest phone but don't want to spend a lot in one go on a new handset.

So - pay monthly or SIM-only?

If your contract has ended, you might want to consider changing to a SIM-only deal if you’re happy with your phone and don't want to upgrade it yet.

Alternatively, if you can afford a new unlocked handset, you could save money over the next couple of years by opting for a SIM-only deal to go with it. You could even sell your old handset and use the money to save on your new handset.

But if you'd rather get a pay monthly deal and take advantage of getting a new phone, go for that instead.

The best option will depend on your individual circumstances, so use the information in this guide and have a think about which is the right option for you.