Should I switch to a SIM-only mobile phone deal to save money?

As household bills continue to rise, switching to a SIM-only mobile phone deal could help reduce costs

close up of sim cards
(Image credit: Getty images)

Household budgets are under pressure as the cost of living soars, which means it’s time to take action and put some cash back in your pocket. Switching to a SIM-only mobile phone deal could help you do just that.

What does SIM-only mean and why is it cheaper?

“A SIM-only mobile phone deal provides you with a SIM card along with monthly allowances for calls, texts and data, but you don't get an actual handset,” explains Kevin Pratt, spokesperson at Forbes Advisor. “Since you're not paying off the cost of the handset alongside the cost of your calls, messages and downloads, SIM-only packages are cheaper than pay-monthly deals that come with a handset.”

All of the main networks offer SIM-only deals, including O2, Vodafone, EE, Sky Mobile and Three, but there are a whole host of smaller networks too, such as giffgaff, Tesco Mobile, iD Mobile and SMARTY. 

Many deals are on a 30-day rolling contract, making it easy to cancel or change to a different package. Others require you to sign up for 12 to 24 months.

How much money could I save by going SIM-only?

The amount you could save will depend on how much you’re paying for your existing mobile phone deal, and how much data, texts and minutes you require.

However, figures from regulator Ofcom show that the average monthly price of a bundled contract in 2020 was £25.86, compared to £10.96 for a SIM-only contract. That’s a difference of almost £15. 

If you’re happy with your current handset, switching to a SIM-only deal as soon as your monthly contract ends could therefore save you an average of around £180 a year. 

(More: How to cut your mobile phone bill

Is SIM-only cheaper than pay as you go?

This depends on how often you use your phone, but in most cases, it’s likely to be. 

With a SIM-only deal you’re given a set amount of minutes, text and data to use in exchange for a monthly fee. Pay as you go (PAYG) deals, on the other hand, charge for calls, messages and data on a per-text, per-minute and per-megabyte basis. You’ll need to pre-load your mobile account in advance, and charges will be deducted accordingly.

“SIM-only deals typically work out cheaper on a per unit level, although you can now buy PAYG bundles that offer better value than traditional PAYG deals,” says Pratt. “A PAYG bundle allows you to buy an allowance of calls, texts and data with your credit.”

Can I keep my number if I swap to a SIM-only deal?

Yes, you can easily keep your number if you want to swap to a SIM-only deal on another network. Simply ask your current network for a Porting Authorisation Code (PAC) by texting PAC to 65075. PACs are valid for 30 days so make sure you share it with your new network before then.

What if I am still in a contract, can I end it early to go SIM-only?

If you switch to a SIM-only deal before your existing contract has come to an end, you’ll pay an early termination fee. This will be based on the remaining months in the minimum term of your contract and could be a significant sum.

Weigh up the size of the fee against the amount you could save by switching to a SIM-only deal to see whether it’s worth paying, or whether you’re better off waiting until your contract ends.

Is it worth going SIM-only?

If you’ve done the maths and worked out that you can get an equivalent bundle of data, texts and minutes for a cheaper price, and your current mobile handset is working well, it’ll likely make sense to go SIM-only. 

However, it won’t be right for everyone. “While 11% of customers on bundled mobile contracts were out of contract in 2020, around 30% of these would not make a saving by switching to an equivalent SIM-only deal,” says a spokesperson for Ofcom. 

“Even if they could save, mobile customers may also choose to remain out of contract for other reasons – for example, if they are waiting for a new handset to launch.”

Always weigh up the pros and cons of SIM-only deals before deciding which option is best for you:

Pros

  • Monthly payments could be cheaper
  • Many deals are on a one-month rolling contract so you can cancel or change deals when you want to
  • Credit checks are less stringent, so it’s a good option if you have a poor credit

Cons

  • You will still need a handset
  • You’ll need to unlock your phone if it’s tied to a particular network.

Use our mobile phone comparison chart to find the best mobile phone deals right now

Rachel Wait is a freelance journalist. She has been writing about personal finance and consumer affairs for over a decade, covering everything from credit cards and mortgages to pensions and insurance. She has written for a range of websites and national newspapers, including Mail on Sunday, the Observer, Forbes and the Spectator.

Rachel is keen on helping consumers understand their finances.