SIM-only vs pay-as-you-go

·6-min read

Keeping the running costs of a mobile phone down is easy when you know how. Look beyond the maze of monthly contract tariffs and you will likely find a surprisingly low-cost deal with a SIM-only or pay-as-you-go offer

While they work in different ways, both avoid the need to lock into an expensive phone contract where the cost of the handset is built into the price.

Since neither ties you to paying for a specific phone, you can also shop around for cheap deals on standalone handsets.

Alternatively if you already own your favourite handset you can easily switch to a SIM-only or pay-as-you-go plan to reduce monthly spend.

Finding the best value deal is key to making sure you have an affordable monthly bill along with the data and functions you need day-to-day.

Here’s what you need to know to help you make the choice of what works best for you.

Related: Compare SIM Only Deals


SIM-only has been wildly popular with those who are happy to keep hold of their existing handset and want to save on bills. It’s a simple contract that buys you a bundle of minutes for calls, texts and a data allowance.

Managing your money is hassle-free as you have one fixed payment each month to make, made automatically by direct debit. As long as you don't go over your monthly allowances, you'll always know exactly what you're paying which helps with household budgeting.

The amount you pay will only increase if you exceed your data allowance or make purchases with your phone.

Part of the attraction of SIM-only deals is the flexibility. While they do come with a contract, some are as little as 30 days. That means you have the freedom to swap if you find a better deal or want to change networks – perhaps the signal at home isn’t as strong as you would like.

Remember though, to check if you need to give notice to avoid charges before ditching the SIM.

There are plenty of deals to choose from with prices starting at as little as £5 a month. The more you spend, the more data you get and more calls you can make.

SIM-only plans work well if you run (and pay for) mobile phones for your children as there are valuable group savings to be made.

BT, for example, offers multiple SIMs for one household, all paid for from a single account. Each additional SIM is 20% cheaper than getting a SIM on its own.

It’s worth noting, if your credit history is less than squeaky clean, that to get a SIM-only contract, your credit history will be checked. The criteria you’ll have to meet, however, aren't as comprehensive as with a contract deal.

SIM-only customers also benefit from the same perks as other contract customers.

Phone providers are always jostling for business and one sure-fire way to win the attention of bill payers is to shower them with freebies.

As an O2 SIM-only customer you can download the O2 Priority Tickets app and purchase tickets for events at any O2 venue 48 hours before they go on general sale, a big plus for music lovers and sports fans.

Elsewhere, EE gives contract customers a free three-month subscription to the BT Sport app, which means you can watch live Premier League and UEFA Champions League matches, Gallagher Rugby, Moto GP and boxing for free on your phone or tablet.

What’s the catch?

There’s not much of a downside to SIM-only deals – it’s pretty straightforward. You just need to make sure you have a decent handset and that you shop around for the best value deal on the market.


Pay-as-you-go mobile deals are another way of saving on an expensive contract phone. As the name suggests, you only pay for the minutes, data and texts that you use, so there is no wastage.

When they run out, you top up credit as and when you need to. It’s a good option if you want to manage your costs and don’t use your phone every waking minute.

Pay-as-you-go deals don’t tie you into any contract and once your minutes, messages and data are used up you simply won’t be able to use your phone to make calls or send texts - there are no hidden charges.

Pay-as-you-go is a flexible option, because you’re not tied into any kind of agreement. If you decide you don’t like the package or after a few months want to change things, you can do so at the drop of a hat.

There’s no credit check at all associated with having a pay-as-you-go SIM. So, if you’re having credit problems, this could be the answer (while you get back on your feet, at least).

There are some perks offered to pay-as-you-go customers, too:

  • O2 Priority Tickets. Access to the app, plus every three months, O2 adds up all your top-ups and gives you 5% or 10% back. You can claim the cashback as extra credit – or save it up to get money off concert tickets, a new mobile or high-street vouchers.

  • Extra data. At EE pay-as-you-go customers can bag an extra 500MB of data after three months if you top up with the same pack three months in a row.

  • Rewards. At Vodafone pay-as-you-go customers can unlock VeryMe Rewards if they top up at least £10 every six weeks. These are the same rewards available to contract customers and include freebies from high street stores such as Costa and Greggs.

What’s the catch?

The downside with pay-as-you-go is that you'll probably pay a bit more if you're a heavy phone user than you would on a contract. Make sure you weigh up all the features before deciding.

Ready for a new deal?

The best way to find a new deal is by checking our comparison websites, which compares tariffs and handset prices.

Whatever deal you go for, you don't have to change your existing number, you can take it with you.

Just make sure you check your existing contract, if you have one, to ensure you don’t attract any penalties by switching.

Related: Compare SIM Only Deals

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