SIM-Only vs Contract Calculator: The True 24-Month Cost Comparison

Every couple of years, the same decision comes round again. The current contract is ending, the network sends an upgrade offer, and the obvious thing to do is take it. New phone, same monthly payment roughly, nothing to think about. Except the monthly payment is rarely the same, the new contract usually runs for two more years, and the alternative, buying the phone separately and going SIM-only, almost never gets seriously considered because comparing the two feels complicated.

This calculator does the comparison properly. It takes the phone price, the contract terms including the price rise that kicks in around month 13, the SIM-only cost, and what the phone might be worth if you sell it after two years, and works out the true 24-month cost of each route. The number that tends to land hardest is the monthly premium, what the contract is actually costing you, in pounds per month, for the convenience of not thinking about any of this.

Who Is This Calculator For?

• Anyone whose phone contract is coming to an end and is deciding between accepting an upgrade offer and switching to SIM-only with a separately purchased phone
• Anyone who has noticed their monthly phone bill go up and wants to understand whether that increase is a one-off or part of an annual pattern built into the contract
• Someone considering buying a phone outright for the first time who wants to see what the real saving looks like compared to bundling the cost into a contract
• Anyone with an old phone to trade in or sell who wants to see how much that value changes the comparison between the two routes
• Anyone weighing up SIM-only providers like Smarty, iD Mobile, VOXI, or GiffGaff against staying with a traditional contract from EE, O2, Vodafone, or Three
• Anyone who has heard that contract price rises are “linked to inflation” and wants to see exactly what that means in pounds over the life of a 24-month contract

Who Is This Calculator Not Suitable For?

• Business or multi-line contracts. The calculator is built around a single individual contract and a single SIM-only plan. Business tariffs, family plans with shared data, and multi-SIM discounts have different pricing structures that this tool does not model.
• Anyone on a contract with a data allowance much different from what SIM-only plans typically offer. If your contract includes unlimited data and the SIM-only plan you are comparing against has a 100GB cap that genuinely would not be enough for how you use your phone, the comparison needs the same data allowance on both sides to be meaningful. Adjust the SIM-only monthly cost to reflect a plan with comparable data.
• Anyone planning to switch network multiple times during the 24-month period. The calculator assumes a single SIM-only plan held for the comparison period. People who actively chase the cheapest deal every few months by switching providers can often do better than even the SIM-only figure shown here, but that requires ongoing effort the calculator does not assume.

How to Use the Calculator

Start with the phone purchase details. Enter the full retail price of the phone you would buy if going SIM-only, and choose whether you would pay upfront or use 0% finance, if finance, enter the monthly payment and term, or override with a total repayable figure if interest applies.

In the contract column, enter the monthly cost of the contract that includes the handset, any upfront payment, any trade-in discount the network is offering, and the annual price rise percentage. Most major UK networks apply a price rise around month 13 of a 24-month contract, the default of 5% is a reasonable starting point but check your specific contract terms, as some networks have applied even more in recent years.

In the SIM-only column, enter the monthly cost of a SIM-only plan with comparable data to your contract, and whether that price is fixed or subject to its own annual rise (many SIM-only deals from challenger networks hold their price for the full term).

The trade-in and resale section lets you account for what your current phone is worth now (reducing the SIM-only phone cost) and what the new phone might be worth if you sell it after 24 months (reducing the SIM-only total further). The extras section covers insurance, often included differently on each route, and one-off accessory costs.

The results show the 24-month total for each route, the monthly premium for whichever is more expensive, and a full breakdown of where the money goes on each side.

How Much Do Contract Price Rises Actually Add Up To?

This is the part of mobile contracts that most people sign up to without really registering, and it is the single biggest factor in why contracts often cost more than the headline monthly price suggests.

Annual mid-contract price rises have been standard practice across major UK networks for several years. The rises were historically linked to a formula based on the Consumer Price Index or Retail Price Index plus an additional percentage, typically 3.9%. In 2023, with inflation running high, this formula produced increases of around 14 to 17% for customers on EE, Vodafone, Three, and O2, a real jump on a contract that was sold as having a fixed monthly price.

Ofcom subsequently ruled that from early 2024, mid-contract price rises must be communicated as a specific pound amount or percentage at the point of sale, rather than linked to a future inflation figure that customers cannot predict when signing up. This has made the rises more transparent, but it has not made them go away. Annual increases of 5 to 8% remain standard on many contracts.

On a £45 per month contract, a 5% rise from month 13 takes the payment to £47.25. Across months 13 to 24, that is an extra £27 compared to if the price had stayed flat, not enormous on its own, but it compounds with the handset’s bundled cost and accumulates across however many contracts someone takes out over the years.

The calculator applies the price rise from month 13 and shows the exact post-rise monthly figure, so the impact is visible in pounds rather than as an abstract percentage.

What Does SIM-Only Actually Cost in the UK?

SIM-only plans from challenger networks have become far more competitive over recent years, and the gap between what they cost and what equivalent data allowances cost as part of a contract has widened.

At the budget end, providers like Smarty, VOXI, and iD Mobile offer SIM-only plans with 50GB to unlimited data for roughly £10 to £20 per month, often with no annual price rise built in, the price you sign up at is the price for the duration of the plan. GiffGaff and Sky Mobile sit in a similar range with slightly different data and rollover structures.

A genuinely useful comparison requires matching the data allowance on the SIM-only side to what the contract includes. If a contract includes unlimited data, comparing it against a 20GB SIM-only plan understates the contract’s value. Most people really overestimate how much mobile data they actually use, Ofcom data has shown UK average mobile data usage sitting well below the unlimited plans many people are paying for, but the comparison should still be apples to apples.

Many SIM-only plans run on a 30-day rolling basis with no contract at all, meaning you can switch provider with one month’s notice if a better deal appears. This flexibility has a value that does not show up directly in the pound figures but is worth factoring into the decision alongside the cost comparison.

What Is Your Phone Actually Worth at the End of a Contract?

The resale value of the phone is the part of this calculation that people are most likely to skip, and it is often large enough to change which option comes out cheaper.

A flagship phone, an iPhone or a top-tier Samsung Galaxy, bought at £800 to £1,000 typically retains 40 to 55% of its value after 24 months if kept in good condition, depending on the model and how close a successor model is to release. That means a phone bought for £900 might be worth £400 to £500 after two years on platforms like CeX, Music Magpie, or through trade-in schemes from the networks themselves.

Mid-range phones depreciate faster as a percentage, typically retaining 25 to 40% of their value after 24 months, though the absolute pound amounts are smaller given the lower starting price.

On a contract, this resale value is essentially invisible, the phone is bundled into the monthly payment and most people do not think about what it would be worth if separated out. On the SIM-only route, where the phone was bought outright, the option to sell it at the end is real and immediate.

The calculator’s resale field defaults to a conservative 40% retention on the example phone price, but this varies by model, checking current resale prices for your specific phone on CeX or Music Magpie before relying on the figure gives a more accurate input.

Trade-In Offers: Network vs Independent Buyers

Most UK networks offer trade-in schemes when you take out a new contract, where your old phone’s value is deducted from the upfront cost or applied as bill credit. These offers are convenient but are not always the best price available.

Independent buyers, CeX, Music Magpie, and similar, tend to offer 10 to 30% more for the same phone in the same condition compared to a network’s trade-in valuation. The network’s offer is convenient because it happens in the same transaction as the upgrade, but the cash difference for a phone worth £300 to £500 can easily be £30 to £100 by selling independently and using the cash toward a SIM-only plan and a separately purchased phone instead.

The calculator’s trade-in field is for the SIM-only path, representing what you could get for your current phone by selling it independently, which reduces the net cost of the new phone you are buying. The contract path’s trade-in field represents what the network is offering as a deduction from the upfront contract cost. Comparing these two figures directly is often illuminating on its own, before even getting to the rest of the calculation.

0% Finance vs Buying Outright: Does It Change the Comparison?

For many people, the practical barrier to going SIM-only is not wanting to spend £800 to £1,000 on a phone in one go. 0% finance through retailers like Apple, Samsung, Currys, or various BNPL providers spreads this cost over 12 to 24 months at no additional interest, which removes the upfront barrier without changing the total cost.

If the finance genuinely carries 0% interest, the total cost is identical to paying upfront, the calculator’s finance option lets you enter the monthly payment and term, and if no total repayable figure is provided, it calculates the total as monthly payment multiplied by term, which should equal the phone’s cash price for a true 0% deal.

Where finance carries any interest, which is more common with shorter-term BNPL providers or in-store finance from some retailers, the total repayable figure should be entered directly, since this represents the true cost of the phone on that finance route. A £900 phone on finance that totals £950 with interest has an effective handset cost of £950, not £900, and the calculator should reflect that.

The broader point is that 0% finance removes the main practical objection to SIM-only without changing the financial outcome, which means the comparison in this calculator applies whether someone pays cash or uses interest-free finance for the phone.

When Does a Contract Actually Make Sense?

The calculator is built to surface the cases where SIM-only and a separate phone purchase saves money, which is most of the time on a pure cost basis. But there are scenarios where a contract is the more sensible choice even if it costs slightly more.

If the upfront cost of buying a phone, even on 0% finance, is genuinely not manageable and the alternative is an interest-bearing loan or credit card balance at typical UK rates of 20% APR or more, the cost of that borrowing can outweigh the saving from going SIM-only. A contract that bundles the phone cost into the monthly payment at an effective 0% (which most contract pricing structures are, regardless of the headline price) avoids this problem.

If a network’s trade-in offer for your current phone, combined with a genuinely good contract deal, perhaps during a promotional period with no price rise for the first 12 months or a substantial upfront discount, narrows the gap a lot, the convenience of a single bill and the included insurance and support that some contracts bundle in may be worth a relatively small monthly premium.

The calculator’s purpose is not to tell anyone that contracts are always wrong. It is to make the actual cost difference visible, so the choice, whichever way it goes, is an informed one rather than a default.

Practical Ways to Reduce the Cost of Either Option

• Check Savzz for SIM-only and eSIM discount codes before signing up to any plan. Our SIM-only and eSIM deals regularly include offers from major challenger networks with extra data, cashback, or reduced first-month pricing that improve the SIM-only side of the comparison further.
• Buy the phone during a sales period rather than at launch. New flagship phones rarely drop in price in the first six months, but previous-generation models and mid-range phones see meaningful discounts during Black Friday, Boxing Day sales, and around the launch of the next generation. Check our mobile phone discount codes for current offers across major retailers.
• Get an independent valuation for your current phone before accepting a network trade-in offer. A 60-second check on CeX or Music Magpie’s website shows what an independent buyer would pay, which is the figure to compare against any trade-in offer from a network.
• Set a calendar reminder for month 11 of any contract to start researching alternatives before the price rise hits at month 13 and before the contract auto-renews into a new term at the end. The 60 to 90 days before a contract ends is when negotiating leverage with your current network and the best switching offers from competitors both tend to be available.
• Browse our tech deals and offers for accessories, cases, and screen protectors, a one-off cost that applies whichever route you choose, and one where discount codes routinely save 20 to 40% versus full retail price.

Frequently Asked Questions

Is SIM-only cheaper than a phone contract in the UK?

In most cases, yes, once the full 24-month cost is considered including the contract’s mid-term price rise and the resale value of a separately purchased phone. The size of the saving depends heavily on the phone’s price and resale value, and on how much the contract’s annual increase adds up to. For an £850 phone with a £350 resale value after two years, against a £45 contract with a 5% annual rise, SIM-only typically saves £15 to £30 per month over the comparable contract. Use the calculator with your specific figures for a personalised comparison.

How much do mobile contract prices increase each year?

Most major UK networks (EE, O2, Vodafone, Three) apply an annual mid-contract price increase, historically linked to inflation plus an additional 3.9%. In 2023, this produced increases of around 14 to 17% for many customers due to high inflation. From 2024, Ofcom requires networks to state price rises as a specific percentage or pound amount at the point of sale rather than linking to future inflation. Increases of 5 to 8% per year remain common, always check the specific terms of any contract before signing.

How much is my old phone worth for trade-in?

It depends on the model, condition, and storage capacity, and varies between the network’s own trade-in offer and independent buyers. As a general guide, flagship phones (iPhone, Samsung Galaxy S-series) retain roughly 40 to 55% of their original value after 24 months in good condition. Independent buyers like CeX and Music Magpie often offer 10 to 30% more than a network’s trade-in valuation for the same phone. Check both before deciding.

What is the monthly premium for a phone contract?

The monthly premium is the extra amount you are effectively paying each month for the convenience of a contract, calculated as the difference between the total 24-month contract cost and the total 24-month SIM-only-plus-phone cost, divided by 24. For a contract costing £400 more than SIM-only over two years, the monthly premium is roughly £16.67. The calculator works this out automatically for your inputs, including price rises and resale value on both sides.

Should I buy my phone outright or get it on contract?

Financially, buying outright (or on 0% finance, which is equivalent in total cost) and going SIM-only is usually cheaper over 24 months, often by £300 to £700 depending on the phone and contract. The main reason people choose a contract anyway is the convenience of a single bill and not having to find a lump sum upfront, though 0% finance addresses the lump sum issue without the cost penalty of a traditional contract. The calculator shows the actual pound difference for your situation so the decision is based on numbers rather than habit.

Do SIM-only plans have price rises too?

Some do, but many SIM-only plans, especially from challenger networks like Smarty, VOXI, GiffGaff, and iD Mobile, are sold with a fixed price for the duration of the plan, with no mid-contract increase. This is one of the structural advantages of SIM-only over traditional contracts. Always check the specific terms, as this varies by provider and by plan, but it is common for SIM-only deals to avoid the kind of annual increase that has become standard on handset contracts.

Who built this calculator?

The Savzz SIM-Only vs Contract Calculator was built by the team at Savzz.co.uk, a UK money-saving and discount code site. We built it because most phone cost comparisons either ignore the mid-contract price rise entirely, or ignore the resale value of a phone bought outright, both of which can be worth hundreds of pounds over 24 months and meaningfully change which option is actually cheaper. This calculator includes both, plus trade-in value, insurance, and accessory costs, to give the true comparison in one place. It is free to use with no account required.