How millions of mobile phone customers could save over £200 a year
Our latest survey of thousands of mobile phone customers found that a quarter are out of contract. This means they could be paying more than they need to for their deal and may potentially still be being charged for a phone they’ve already paid off.
Mobile providers make it very easy for customers to languish in being out of contract on a poor-value deal or to sign up to a new lengthy, expensive contract. This results in long-term, perhaps unintentionally loyal, customers. Our survey also found that nearly 40% of mobile phone users haven't changed their provider in more than five years.
Unfortunately, this loyalty is often not rewarded. You may get sent deals by your provider, but there will likely be cheaper alternatives elsewhere. To make savings, you need to take action.
Our guide to the best and worst mobile networks reveals those can ranked highest for customer satisfaction.
How much you could save by switching mobile providers
Our survey found that the average out-of-contract customer across all mobile providers pays £19.01 a month and customers of the biggest four pay on average £22.30 a month.
These customers could stand to make significant savings. We’ve worked out how much customers from each of the big four could save if they switched to our current expert pick of low, medium and high data deals – updated regularly and chosen against a range of criteria, including length of contract, value for money, how a provider scores in our regular satisfaction survey and any extras it offers. A range of providers offer other great-value Sim deals though, so shop around to pick one that suits your needs.
See all our expert picks of the best mobile phone and Sim-only deals to browse a range of low-cost providers.
How much EE customers could save
Out-of-contract EE customers pay the most on average, although they may be eligible for a 10% discount after being out of contract for three months if the previous contract included a phone.
Our survey found that EE out-of-contract customers pay on average £23.80 per month.
- Our pick for low data: Smarty 4GB for £5 - potential savings of £18.80 per month.
- Our pick for medium data: iD Mobile 20GB for £7 - potential savings of £16.40 per month.
- Our pick for high data: iD Mobile 200GB for £14 - potential savings of £9.80 per month.
How much Three customers could save
Three does not apply any discount for out-of-contract customers, so they will continue to pay their full rate.
Our survey found that Three out-of-contract customers pay on average £21.50 per month.
- Our pick for low data: Smarty 4GB for £5 - potential savings of £16.50 per month.
- Our pick for medium data: iD Mobile 20GB for £7 - potential savings of £14.50 per month.
- Our pick for high data: iD Mobile 200GB for £14 - potential savings of £7.50 per month.
How much O2 customers could save
O2 offers split contracts, so the device and airtime parts of the contracts are charged separately. This means customers won’t be overcharged when their phone has been paid off, but it’s still worth shopping around for a cheaper Sim-only deal, as O2’s can be expensive.
Our survey found that O2 out-of-contract customers pay on average £21.30 per month.
- Our pick for low data: Smarty 4GB for £5 - potential savings of £16.30 per month.
- Our pick for medium data: iD Mobile 20GB for £7 - potential savings of £14.30 per month.
- Our pick for high data: iD Mobile 200GB for £14 - potential savings of £7.30 per month.
How much Vodafone customers could save
Vodafone’s Evo customers will be in a similar situation to O2 customers, as their contracts are split. However, legacy customers - who joined Vodafone before Evo launched in June 2021 - will still be on bundled contracts and potentially paying extra.
Our survey found that Vodafone out-of-contract customers pay on average £22.20 per month.
- Our pick for low data: Smarty 4GB for £5 - potential savings of £17.20 per month.
- Our pick for medium data: iD Mobile 20GB for £7 - potential savings of £15.20 per month.
- Our pick for high data: iD Mobile 200GB for £14 - potential savings of £8.20 per month.
Unfair overcharging when contracts end
Paying more than you need to for a mobile bundle when you contract ends isn't the only concern for out-of-contract customers – in some cases you may end up continuing to pay for a handset that has already been paid off.
Most bundled mobile phone contracts include a single monthly charge that factors in the cost of the handset and a bundle of minutes, messages and data. At the end of the contract period, the mobile phone repayment portion of the bill should no longer be charged - the cost of the phone has now been paid off. Unfortunately, providers don’t necessarily reduce your payments automatically.
The big four (Vodafone, EE, Three and O2) handle out-of-contract customers in different ways, and it can depend on when you took out the contract:
- EE says it will apply a 10% discount to any customer who had a contract including a handset and has been out of contract for three months.
- For some Vodafone customers who took out a contract before it introduced evo split contracts, it has said that three months after a contract ends, it will reduce the price of the contract by £5 per month.
- Three has decided not to apply any discount to bundled customers when their contracts end - essentially continuing to charge customers at the full rate for a phone they’ve already paid for.
- O2 automatically moves customers who have bought direct from O2 to a rolling contract with an equivalent airtime allowance, but customers who buy through a third party should check to ensure they are moved to an airtime allowance when a contract ends.
In most cases these discounts will not come close to offsetting the overpayment on the handset. In addition, discounts applied by EE and Vodafone only come into effect three months after customers have gone out of contract, which means that some of these customers may not have yet seen a change in their monthly costs.
Are you overpaying for data you don’t use? Read our 10 ways to save money on your mobile phone bill.
Being out of contract is the ideal time to switch
If you can’t get a deal you’re satisfied with by haggling, switching mobile provider is easier than ever. You need a porting authorisation code (PAC), which you get with a simple text from your current network provider. Previously, to get a PAC you had to call your provider, who would often try to deter you from switching and make the process frustrating.
To switch and keep the same mobile number, text PAC to 65075. Your current mobile provider should send you a text within one minute and the PAC lasts for 30 days. The text will also have important information such as any charges for early termination (although this won’t apply if you’re out of contract). Give the PAC to your new provider, which has to complete the switch within one working day.
To switch and change your number, text STAC to 75075 to receive your service termination authorisation code, then follow the same procedure as if you’d received a PAC.
For more information on switching, such as how to switch if you're in a contract, and how to choose a provider with the best signal, read our full guide on how to switch mobile provider.
Or try haggling with your mobile provider
If you like your provider but want to save money, try haggling first to see if you can get a better deal. If you don’t like handling these types of situations over the phone, plenty of providers now offer a live chat function where you can haggle through typed or texted messages.
Prepare yourself for haggling with these three steps:
- Use Which? Compare to find examples of deals you would be happy with. Shop outside the 'big four' - EE, Vodafone, O2 and Three. Deals from virtual networks – smaller providers that use the signal from the 'big four' – are often more competitive.
- Note the best offers that suit your needs, call your provider and say you've found a better deal. Ask if they can match, or beat it.
- Don't be afraid to threaten to switch provider if you are not offered an acceptable new deal.
Which? calls for change in the telecoms market
Which? has been calling on providers to allow all customers to leave without penalty if they face mid-contract price rises, but each of the big four has chosen to push on with price hikes of up to 17%. As Ofcom reviews inflation-linked mid-contract increases, we will continue to push for changes to regulation that ensure customers aren’t caught in a lose-lose situation between high price increases and even higher exit fees.
Rocio Concha, Which? Director of Policy and Advocacy, said:
'Our findings show that some out-of-contract big four customers could save over £200 a year just by switching mobile providers. Anyone in that position should be thinking about making a switch or at least haggling for a much better deal from their current provider.
'However, millions will be trapped in costly contracts by exorbitant exit fees - and feeling the pain of eye-watering price increases of up to 17%.
'Which? believes it's absolutely critical that Ofcom's review of inflation-linked mid-contract hikes results in changes that ensure customers are never trapped in this situation again.'
If you're out of contract, keep in mind that you don't have to accept any price rise – you're free to shop around to find a better deal. In many cases you'll find that it will save you money and you may get a better service. But check the terms and conditions of any new contract carefully so you're aware of your new provider's policy on price rises.
Find out more about Which?'s cost of living campaign.
How the providers responded
EE told us it aims to ensure customers are on the best deal, with periodic reminders and updates about the latest deal, and that out-of-contract customers are eligible for a 10% discount after being out of contract for three months.
Virgin Media O2 said its split-contract offering automatically reduces customers’ bills as soon as they’ve finished paying for their handsets, and highlighted other benefits such as inclusive EU roaming and O2 Priority.
Vodafone told us that it encourages customers to review plans at the end of a contract, and that it notifies customers of the best-value deals available.
Three declined to comment.
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