There are two ways to pay for a phone. You can take a pay monthly contract that bundles the handset and the plan, or you can buy the handset yourself and add a separate SIM only plan.
Ofcom’s research points the same way each time: buying the handset separately usually costs less overall, but it needs a lump sum or a way to spread the payment. This guide shows how to test both routes for the phone you want.
When each route tends to win
Buying outright usually suits you if you:
- can pay the price in one go, or spread it with an interest free plan
- keep a phone for three years or more
- like the freedom to change plan or network whenever you want
- already have a SIM only plan you are happy with
A contract usually suits you if you:
- would rather not pay a large sum at once
- upgrade every year or two
- want one provider and one bill for the phone and the plan
- can pass the credit check
What Ofcom found
| Finding | Figure |
|---|---|
| Saving from buying the handset outright and using it with a SIM only plan, Ofcom’s 2024 research | Around a quarter, or more than £200 in total |
| Extra paid for getting the phone from the provider, same research | £6 to £11 a month |
Ofcom’s 2026 report repeats the conclusion, saying a bundle can be significantly more expensive. Ofcom has also accepted that a one off payment is out of reach for many people, which is why contracts remain popular.
Work out the answer for your phone
- Find the SIM free price of the phone from the manufacturer or a retailer.
- Choose a SIM only plan with the data you need. Multiply its monthly price by the number of months you expect to keep it.
- Add the two figures together. That is your outright total.
- For the contract, take the upfront cost, add the monthly price for every month, and add any yearly rises. That is your contract total.
- Compare the two. If the outright total is lower, check you can afford the way of paying before you choose it.
Our guides to SIM only deals and phone contracts explain each side of the sum in detail.
Ways to pay for a phone outright
| Way to pay | How it works | Worth knowing |
|---|---|---|
| Savings or debit card | You pay the full price now | No borrowing. Your card provider may help through chargeback if something goes wrong. |
| Credit card | You pay the full price on the card | Section 75 makes your card provider jointly responsible with the retailer for a single item costing over £100 and up to £30,000. Interest applies if you do not clear the balance. |
| Shop or manufacturer instalments | You spread the price over several months | This is credit, so expect a credit check. Some plans are interest free, while others charge around 15%. |
| Buy now pay later | A lender splits the price into short instalments | The FCA has regulated these since 15 July 2026. You can complain to the Financial Ombudsman about agreements made from that date. A shop that offers its own credit stays outside the rules. |
| Trade in an old phone | The trade in value cuts the price | Value falls fastest in the first two years, so trade in sooner rather than later. |
If you borrow to buy, our guide to mobile credit checks explains how a hard search affects your file.
If the phone goes wrong
When you buy outright, the shop is responsible under the Consumer Rights Act, not the manufacturer. You can reject a faulty phone for a full refund within 30 days. From 30 days to six months, you are entitled to a repair or a replacement, and you do not have to prove the fault was there from the start. After six months you may need to show the fault was there from day one.
Orders placed online or by phone also carry a 14 day right to cancel, counted from delivery, even when nothing is wrong. Buying in a shop does not give you that right.
How long you plan to keep it
A contract bills you for the whole term, but phones now last longer than that. Google promises seven years of updates for the Pixel 10 range, and Samsung promises the same for the Galaxy S26 range. The Galaxy A57 gets six years. Apple does not publish a figure, and iPhone 17 models are expected to be supported for at least six years. If you keep a phone for that long, owning it and pairing it with a cheap plan usually wins.
If you swap every year or two, resale matters more. UK trade in studies have found that iPhones keep more of their value than most Android phones, though every model loses a large share in the first two years.
Middle routes
A refurbished phone with a SIM only plan costs less than either new phone route. See our guide to refurbished phones and trade in. Some providers also split the contract into a phone agreement and a plan agreement. That shows the two costs separately, but you are still borrowing the price of the phone.
Where to go next
On our mobile deals comparison, the SIM free and SIM only tabs show the two halves of the outright route, and the New contract tab shows the bundled price for the same phone. To pick the phone first, see the best phones in the UK and budget and mid range phones.
FAQs
Do I need a credit check to buy a phone outright?
Not if you pay in full. Instalment plans and buy now pay later involve an affordability or credit check, because they are forms of borrowing.
Can I return a SIM free phone if I change my mind?
Only if you ordered online or by phone, in which case you have 14 days from delivery. If you bought in a shop, the shop’s own returns policy applies.
Is a split contract the same as buying outright?
No. The phone is a loan inside your contract, and the plan keeps its own term. You can read the difference in our guide to phone contracts.