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What happens when your contract ends?

8th August 2018

There are three certainties in this world: death, taxes and that your smartphone contract will come to an end. But what happens when it does? And what should you do?

Well, there are a number of options, from doing nothing at all (usually a bad idea), to getting a new phone, changing your plan type or even changing your network.

Below we’ll look at all these options in depth, so you’ll know exactly what happens and what your choices are.

What happens if you do nothing?

You don’t actually have to do anything when your contract ends, but if you don’t you’ll typically keep paying the same price for the same allowances.

That’s a bad idea, because the price you were paying while in contract factored in the need to pay off your new phone, so you don’t want to keep paying for a phone that’s already paid off.

Depending on your network the phone payments may stop, bringing you down to a lower monthly price. For example, O2 Refresh tariffs do this by splitting your monthly charge into phone payments and your ‘Airtime Plan’ (what you pay for allowances). So after 24 months you only have to pay the Airtime Plan.

If you’re on a plan like this and are happy with your current handset then doing nothing can be fine, but we’d still recommend at least seeing what other options you have, by shopping around for deals or calling your network to see what they can offer you.

Get a new phone

We’d wager that getting a new phone is the most common thing people do when their contract comes to an end. This means signing up for a new – usually 24-month – contract, with a new handset included and likely a new set of allowances.

You may be able to stick with the same allowances if you’re happy with them, but you’ll have the option to change.

Advantages of getting a new phone is that you can potentially get it ‘free’, by which we mean with no upfront cost and your monthly payment not changing much (depending on what handset and allowances you opt for). That can be very tempting if you’ve stuck with the same phone for two years or more.

Of course, that also means you’re locked into a contract for quite a long time, and the new phone isn’t really free, since alternatively you can lower your monthly price, as we’ll explain below.

Move to SIM Only

If you’re happy with your current handset then your best option might be moving to a SIM Only plan. This doesn’t come with a new phone, but it means the amount you pay for your monthly allowances is lower (since you’re not also paying off a phone).

SIM Only plans are also usually shorter term, typically coming in at either 30 days or 12 months (with 12-month plans generally being the cheapest option).

So you get more flexibility, and you’ll also be able to choose a different selection of allowances from the ones you currently have if you want.

And while SIM Only doesn’t come with a handset, you’re obviously free to buy a phone outright and use it on SIM Only. This can sometimes be cheaper than a contract phone overall (though of course you have to pay a lot more upfront). But that’s not always the case, so it’s worth seeing how prices compare for the handset you want.

Move to Pay As You Go

If you don’t want to be tied in to a contract at all, or the amount of minutes and data you need varies a lot each month, then you might want to consider moving to Pay As You Go. This means only paying for the minutes, texts and data that you use and having no contract at all.

On many networks you can get ‘bundles’, ‘add-ons’ or ‘packs’, which give you a 30-day allowance of minutes, texts and data, similar to SIM Only, but these are usually optional.

The downside to Pay As You Go (other than not getting a new phone as part of it) is that the costs are often higher than SIM Only for the same amount of allowances. This isn’t universally true but tends to be. Of course, when it comes to the new phone part, as with SIM Only you have the option to buy a handset outright and use it on Pay As You Go.

Change network

The final option you have is to completely change network. After all, since you’re not on a contract any more you’re free to leave.

If you change network you’ll still be able to choose from any of the options above. So you could go Pay Monthly and get a new phone, go SIM Only or opt for Pay As You Go.

There are any number of reasons you might want to change network. Perhaps you haven’t been happy with the service or coverage of your current one, or maybe some of the extras offered by a rival network appeal to you. Or maybe another network is simply cheaper. For example, you might be tempted by the widespread free roaming of Three, the great coverage of EE or the low prices of Giffgaff.

Certainly, it’s worth seeing what the competition can offer before making any decisions, as the grass sometimes is greener.

Changing network is easy too. Not quite as simple as staying with your current one, but you usually just have to request a PAC code from your current network then supply it (and a few personal details) to your new one. That way you’ll be able to keep your old number.

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