What are pay as you go phones?
Pay as you go phones are handsets you buy outright, then run on a SIM you top up or renew month by month. There is no contract tying the phone to a network. You own it from day one, and you choose the airtime separately.
The alternative is the classic phone contract, where the handset and the airtime are paid off together in one monthly bill. Both get you a phone. The difference is how you pay for it, how long you are tied in, and what happens when you want to leave.
Nobody at your phone provider is going to ring you up and ask whether your deal still makes sense. So it is worth doing the sum yourself before you sign anything.
Are pay as you go phones cheaper than a contract?
Sometimes, and the only honest way to know is to add up the total cost over the same period. For pay as you go phones, that is the price of the handset plus the cost of the SIM for, say, 24 months. For a contract, it is the upfront fee plus every monthly payment across the whole term.
Put the two totals side by side. Whichever is lower is the cheaper option for that phone, at that moment. The answer changes from phone to phone and from deal to deal, which is why we can’t give you one figure that holds for everyone.
A few things tip the balance. If you already own a phone that works, you don’t need a new handset at all. Ofcom’s guide to switching mobile provider says that if you already have a phone, SIM-only deals are usually the best value. If you are happy with a mid range or older model rather than the newest flagship, buying it outright for a pay as you go plan is a smaller sum to find in one go. Our guide to budget smartphones covers what to look for.
How contract phones are set up now
Contracts have changed in ways that make the comparison with pay as you go phones fairer than it used to be.
Ofcom’s checklist for a new contract says your contract for the service should be no longer than 24 months. Some mobile handset contracts may be longer, but then the handset contract should be separate from the airtime contract, which cannot be longer than 24 months. Ofcom also says providers must offer a contract option no longer than 12 months for each service. If you leave early, Ofcom says early termination charges shouldn’t be more than the payments left on the contract, and in some cases could be a lot less.
Price rises are clearer too. From 17 January 2025, Ofcom banned providers from including inflation-linked or percentage-based price rise terms in new contracts. Any rise written into a contract must be set out in pounds and pence, prominently and transparently, at the point of sale, with the date it applies. That means you can include it in your total cost instead of guessing.
Before you choose, check
- The total cost of each option over the same number of months, rise included.
- Whether the contract keeps charging once the phone is paid off, and how the handset and airtime are split.
- How much data you really use, from your phone’s settings.
- Whether you are still in contract now. Text INFO to 85075 to check.
Can you use pay as you go phones on any network?
For phones sold by networks in recent years, generally yes. Since 17 December 2021, Ofcom has banned mobile companies from selling locked handsets, so a phone bought from one network can be used on another without paying to unlock it.
That is good news whichever route you take. Pay as you go phones bought outright give you the most freedom, because you can move the SIM whenever a better plan comes along. If you have an older handset from before the ban, ask your current provider whether it is locked before you buy a new SIM.
Coverage still matters more than the badge on the SIM. Check the network’s coverage where you live and work before you commit to any plan.
Who suits pay as you go phones?
Pay as you go phones tend to suit people who want control over what they spend and how long they are tied in. That might be someone who doesn’t want a long contract, a parent sorting out a first phone for a child, or anyone who would rather pay for the handset once and be done with it.
A contract can suit you better if you want the latest model and would rather spread the cost, as long as the total adds up. If you are leaning that way, our guide to phone contracts and your credit score explains how credit checks come into it.
For the SIM side of things, our guide to pay as you go mobile deals compares rolling plans with longer SIM only deals.
How to switch to pay as you go phones and keep your number
Switching is quick under Ofcom’s rules. Text PAC to 65075 for a free code to keep your number, or STAC to 75075 if you do not want to keep it. Your current provider must reply with the code within one minute, and the code is valid for 30 days.
Your provider must also send important information such as any early termination charges, or your credit balance if you are already a pay as you go customer. Give the code to your new provider and they must complete the switch within one working day. If you are moving to pay as you go phones from a contract, check those charges before you go.
Frequently asked questions about pay as you go phones
- Do pay as you go phones come with a contract?
- No. You buy the handset outright and pay for the airtime separately, either as you go or on a rolling plan you can stop.
- Can I put any SIM in a pay as you go phone?
- Phones sold by networks since 17 December 2021 should not be locked, so they work with other networks’ SIMs. Older handsets may still be locked, so check with the provider that sold them.
- How do I work out if pay as you go is cheaper?
- Add up the handset price plus the SIM cost over the same months as the contract, then compare it with the contract’s total cost, including any price rise set out when you sign.
- Can I keep my number if I move to pay as you go?
- Yes. Text PAC to 65075, give the code to your new provider, and your number moves across.
Sources
- Ofcom, Switching mobile phone provider. Supports SIM-only usually being the best value if you already have a phone, the PAC and STAC shortcodes, the one minute reply, the 30 day code validity, the one working day switch, the INFO 85075 contract check and the information your provider must send with the code.
- Ofcom, Checklist when taking out a new phone or broadband contract. Supports the 24 month service contract limit, the separate handset agreement, the 12 month contract option and the cap on early termination charges.
- Ofcom, Ofcom bans mid-contract price rises linked to inflation, published 19 July 2024. Supports the 17 January 2025 ban and the pounds and pence requirement.
- Ofcom, EECC implementation slides. Supports the 17 December 2021 date for the ban on selling locked handsets.
Checked 10 November 2026.
