A phone contract gives you a handset and a monthly plan in one agreement. You pay a set amount each month for the phone and for your calls, texts and data, usually over 24 months.
It lets you spread the cost of an expensive phone, but it costs more than a SIM only plan and ties you to one network until the end. Ofcom has found that buying a handset and airtime together can be significantly more expensive than a SIM only plan with a separately bought phone. This guide explains how phone contracts work, what to add up before you sign and what to expect at the end. When you are ready to choose, use the New contract or Upgrade tab on our mobile deals comparison.
How a phone contract works
You pay an upfront cost, which can be small or nothing, then a monthly payment for the length of the contract. You get the phone straight away. Once you have made every payment, the phone is yours.
Providers must tell you what the handset and the airtime would cost separately, and give you a short summary of the main contract terms before you sign. Some plans go further and split the phone and the plan into two agreements, which shows the handset payment and the airtime payment on separate lines. After the phone is paid off, you pay only for the airtime.
A phone contract suits you if you want a new phone without paying for it all at once, and you are happy to stay with one network for the full term. If you already have a phone, SIM only deals usually cost less.
Contract lengths
| Length | What to know |
|---|---|
| 12 month | Offered by some providers. The monthly payment is usually higher because the phone is paid off faster. |
| 18 month | Offered by a few providers. |
| 24 month | The most common term. |
| 36 month | Offered by some providers. The monthly payment is usually lower, but you are tied in for the longest, and the phone may feel dated before the contract ends. |
What a phone contract really costs
The monthly payment alone does not show the full cost. Add up every part for the whole term.
| Part of the cost | What to include |
|---|---|
| Upfront cost | Anything you pay before you get the phone |
| Monthly payments | The monthly price multiplied by the number of months |
| Price rises | Each yearly rise shown in pounds and pence, added for every year you pay it |
| Extras | Insurance, add ons or delivery, if you choose them |
| Total | The four lines added together |
Compare that total with a SIM only plan over the same number of months, plus the price of the same phone bought outright. Our guide to buying a phone outright or on contract shows the comparison step by step.
Since 17 January 2025, providers must show any planned price rise in pounds and pence before you sign. Rises still happen, so read the figure on the deal page. If a provider raises your price by more than you agreed, you can leave without a penalty within 30 days of being told. See mobile price rises for how to check your own contract.
Credit checks
A phone contract is a form of borrowing, so the provider runs a hard credit search when you apply. Experian lists a pay monthly phone contract as an example of a hard search. A hard search stays on your credit file, and too many in a short time can affect your score for around six months.
Apply for one deal at a time, and leave a gap before you try another. Eligibility checkers use a soft search, which does not affect your score. If you are new to the UK or have little credit history, the check may fail. Our guide to mobile credit checks covers your options.
Ordering online or in a shop
If you order online or by phone, you have 14 days to cancel without a fee. Tell the provider in writing within that time, and expect to return the phone. If you sign in a shop, you do not have this right, so read the terms before you agree.
Leaving or upgrading early
If you leave a phone contract early, you usually pay the remaining monthly payments. A price rise above what you agreed is the main exception, as the 30 day exit right above allows. If you want to switch network, check that the phone is unlocked. Networks have not been allowed to supply locked phones since December 2021, but an older phone may still be locked.
Early upgrade rules differ by provider and plan, and some charge a fee. Check yours before you rely on one. Our guide to upgrading your phone covers the timing.
When your contract ends
Your provider must tell you between 10 and 40 days before the minimum term ends. That message must show its best deals, including at least one SIM only deal if you have a bundled phone contract. If you stay out of contract, it must send you best deal information at least once a year.
Once the phone is paid off, you can keep it and move to a SIM only plan, or take a new contract. Staying on the same payment means paying a handset price for a phone you already own. Text INFO to 85075 to check whether you are still in contract. To keep your number when you leave, follow our steps for switching mobile provider.
Ready to compare?
Use the New contract or Upgrade tab on our mobile deals comparison to compare phones by network, data, monthly cost and upfront cost. Check the coverage where you live first, with our guides to mobile coverage and the best mobile networks. Read the final price and terms on the provider’s page before you pay.
FAQs
Do I own the phone on a contract?
Once you have made all the payments, yes. Some providers split the phone and plan into two agreements, so read your terms to see exactly when the phone is yours.
Can I pay off the rest of my contract to upgrade early?
It depends on the provider. Some do not allow you to settle the remaining months in order to upgrade, and open upgrades only at an eligible date, which you can usually find in your account or app.
Should I insure a phone on contract?
It is optional, and a provider’s own cover is not your only choice. Our guide to phone insurance explains what policies cover and where you may already have cover.