CHOOSING between a pay-monthly mobile contract or a sim-only deal is always a tough call.

And with the cost of living at an all-time high, it's worth considering the cheapest option.

We spoke to a mobile phone expert at Uswitch.com to help explain the cheapest method when it comes to upgrading your phone and/or contract.

Mobile expert Ru Bhikha said choosing between buying a pay-monthly and sim-only can be tricky.

Pay-monthly contracts involve a fixed monthly fee over an agreed period of 12, 18 or 24 months which covers the cost of both the mobile tariff and the cost of the device.

Sim-only deals, as their name suggests, involve a monthly fee that only covers your mobile services, including call minutes and text and data allowance.

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With a sim-only deal, customers will need to have a working handset already as these aren't included in this type of contract.

Ru said: "Picking between pay-monthly and SIM-only mobile deals can be a tough call, as they offer different benefits to different people.

"Traditionally, pay-monthly offers have ruled the roost, wrapping up and spreading the cost of a new handset over the length of a contract – typically 12 or 24 months – along with allowances for data, calls and texts.

"But sim-only deals are surging in popularity and they're cheaper in the long term."

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Ru explains which mobile contract is best depending on your circumstances, as well as his top tips on how to bag the best deal.

Contracts with a handset are expensive but they work for some

Over the full course of a pay-monthly contract, customers will end up paying more for their handset than those who buy one directly from a retailer.

But this isn't always a bad thing, according to Ru.

He said: "For fans of the latest smartphones, which can now cost more than £1,000, taking out a pay-monthly deal means you can pick up a top-of-the-range handset immediately without facing a big one-off bill."

For example, buying the new iPhone 14 Pro Max 128GB outright would cost £1,199 directly from Apple.

Ru added: "If you wanted to spread the cost, you could get the same device on a 24-month contract with O2, including unlimited calls, texts and 100GB data, for £57 a month plus an upfront cost of £149."

But in total, you'd end up spending £1,517 across the 24 months, and if you were to pick up a sim-only deal and pay for the handset yourself you could save hundreds across the same period.

Some contracts are still affordable

If you still don't have the upfront cash to pay for a handset and want to spread the cost over a longer period, Ru said some contracts are still affordable – especially if you're not after a flagship phone.

Ru said: "If you don’t pick a flagship phone, your contract will be more affordable.

"Talkmobile is currently offering Google’s mid-range Pixel 6a handset, which was released in July, with 50GB of data and unlimited calls and texts for £16 per month on a 24-month deal."

Sim-only plans are the cheapest option

Ru said: "If you can afford to pay for a handset upfront, or already have a phone you’re happy to keep on using, taking out a SIM-only plan is still the cheaper option."

"Basic sim-only offers can start from as little as £3.95 a month at Uswitch, for 1GB of data, 200 minutes of calls and unlimited texts from Lebara.

The cheapest rolling plans for unlimited data, calls and texts start from £15 a month with Asda Mobile and Smarty.

And if you can afford an expensive handset in the short term, taking out a sim-only plan is the cheapest option in the long term.

For example, you could save £288 over 24 months if you got a £12 a month sim-only deal with unlimited calls, texts and 100GB and bought the iPhone 14 Pro Max handset for £1,199.

How can I bag the best mobile deals?

Ru said to take advantage of what he calls "mid-range magic".

Advances in smartphone technology mean mid-range handsets are comparable to some of the best devices from a year or two ago.

Ru said: "If you fancy a new phone without paying flagship prices, a model like Apple’s iPhone SE or the Samsung Galaxy A70 still offers great specs."

Customers shouldn't shy away from a refurbished handset.

Ru said: "If you’re looking to buy a mobile, a refurbished phone, virtually identical to a brand new device, can be a great money-saving option."

Top-grade reconditioned handsets have a guarantee and could save you hundreds of pounds.

We've already explained how you can save hundreds by buying a pre-loved mobile phone.

But most importantly, do your homework before you commit to a new deal.

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Ru said: "Everyone is different so make sure you find the perfect phone deal to match your requirements."

A comparison site like Uswitch or MoneySuperMarket will show you a wide range of mobile phone deals from across the market and also have exclusive and limited-time offers.

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