What is a pay monthly phone plan and is it right for you

Most of us today do not buy our phones upfront. Instead, we opt for a pay monthly phone plan. This includes the plan and phone. This is perfect for most people because it means you don’t need to pay for a phone upfront.

Although pay monthly plans suit a lot of people they may not necessarily be the best option. It all depends on your situation and whether you’ve got cash in the bank to buy a phone upfront.

There are many different mobile network operators who provide pay monthly plans. It’s always beneficial to shop around first to make sure you get the one that is right for you.

Firstly, you want to ensure the plan provides the minutes, text and data you need. Secondly, you’ll want a plan, which allows you to get the phone you’d prefer. Not all providers stock the same phones. So you may need to compromise on the phone or plan to get the best match.


Most phone plans are either 18 or 24 months in length. You can get 12-month plans but these are far less common today. This is mainly because phones have increased in price, so paying for a plan and a phone over 12 months would come with a high monthly cost.

By signing up to an 18 or 24-month contract the network providers are able to offer you a high-spec phone and a decent phone plan. While trying to keep the cost of the plan as cheap as possible. Monthly phone plans are more expensive than sim only plans, but you do need your own phone to take advantage of a sim only plan.

It’s tempting to opt for a 24-month phone plan rather than an 18-month plan because you get a cheaper monthly cost. However, you do need to consider this means you’ll be tied to that network for two years.


If you can afford it you’ll generally save money buying a phone upfront. This is because most monthly phone plans include a price for the phone, which is more expensive than it is to buy outright.

You’re essentially getting credit when you sign up to a pay monthly phone plan. So the price difference could be considered as interest. Although it’s not marketed this way. It’s the only real explanation to why a phone company will charge you more for the phone over a 24-month term than it would be for you to buy outright.

Because of this, you’ll save money if you buy the phone outright. You can then opt for a sim-only plan, which is much cheaper. The savings you make can be anything from £50 to £300 or even more over the term of the contract if you buy the phone upfront.

Of course, not everyone will be able to buy a phone upfront. If this is the case and you want the latest phone. Then a monthly phone plan is a good choice.


The network provider you’re currently with wants to keep your business. One way they’ll try to do this is by offering you an upgrade.

You may be offered an upgrade slightly earlier than when your contact is about to end. This gives you the opportunity to get the new phone you’ve been eagerly been waiting to get your hands on.

If you are happy with your network provider and like to have a new phone every two years. Then upgrading near the end of your contract is the best way of doing this.


When you’ve reached the end of your contract the phone belongs to you. This means you’ve got the freedom to move to a new mobile provider if you prefer.

However, most phones during the contract are locked to that specific network. This stops you being able to use the phone elsewhere. At the end of the contract, a phone may be unlocked automatically or you may need to ask your current provider for an unlock code.

You can upgrade to a new phone at the end of your mobile phone contract
You could upgrade to a new phone at the end of your contract

Once your phone contract has ended you could either keep your phone and buy a separate sim-only plan. This will dramatically decrease your monthly cost of using the phone. This is because you’ve now paid for your phone, so you’re only paying for the calls, texts and data with a sim-only plan.

Buying a sim-only plan at the end of your contract is a great way to save money. Your phone maybe 24 months old, but you’d usually be able to get another one or even two years use out of it. If you do this, you do need to consider what you will do when your phone eventually stops working.


If you don’t own a phone that you can use for more than 12-months without the risk of it giving up on you. Then buying a pay monthly phone plan is a good choice for some.

If you like to have the latest phone, but don’t want to pay for it upfront. Then a pay monthly phone plan is perfect. Also, at the end of the contract, you then have the flexibility to keep the phone and lower your costs with a sim-only plan. Alternatively, you can upgrade and get a new phone and start the cycle all over again.

If you’d prefer to have the latest phone every two years. Then you’re most likely best to choose a pay monthly plan. Just remember it may work out a little more expensive than buying the phone outright.