Every year, millions of people are left without a contract in their telecommunications agreements (the most common are broadband, mobile phone and television).
We typically take out a 24-month contract* and pay a monthly fee that increases each April with inflation-linked increases.
These increases look set to be even bigger from next year, thanks to new rules that mean telcos must demonstrate how much a bill will increase using pounds, rather than percentages.
In terms of mobile phone contracts, the costs are divided into two parts: the phone and the data/minutes/texts. Goals have changed a bit in recent years, with most offering unlimited minutes and texts, and then a varying level of data.
Data is often the most crucial element, as text messages have faded away and been replaced by messaging apps, which require Wi-Fi or data, and calls can also be made this way.
You can often get away with a relatively small amount of data, if you connect to Wi-Fi at home, in an office, or out and about, although if you don’t and you go over your data allowance, the additional costs can skyrocket.
Simplifying the Sim: Once your contract is up, it’s time to get a much cheaper Sim-only deal
But what often happens is that the contract comes to an end, we leave it too late to compare prices or be tempted by an “upgrade”.
That is, a phone that you probably don’t need, putting your phone in perfect condition in a drawer and never seeing the light of day again.
Meanwhile, some do nothing at all and continue paying the monthly amount, a large part of which is the phone you now own, since you’ve paid for it.
It’s an epic waste of money, one of which is estimated to cost hundreds of millions of pounds each year.
What I usually do is get to the end of the contract, look for the best Sim-only deal, and try to keep the same phone for three more years.
In my opinion, a phone should last five years.
It works for me, and let’s face it, how much more impressive can smartphones get? We can now take great photos, listen to millions of songs and watch high-quality television at our fingertips. I can’t see how much better a phone can be.
Recently, as I was nearing the end of a £35 a month contract with Three Mobile, I started shopping around. In the end, I got an exclusive deal for Sim with Three himself.
It’s not the cheapest deal I found, but for convenience and to avoid going to a cell phone provider I’m not familiar with, I took advantage of it.
For £11.20 a month with a loyalty discount on a one-year contract, I get 12GB of data. More than enough for me.
But a crucial reason I stayed is their Three+ membership. Firstly, it offers a weekly cinema ticket to Cineworld for £3 to use over the weekend, making it a super cheap activity with my six year old when we occasionally choose to go, especially on wet, wild days. and dark of winter.
However, the second benefit is even more valuable to me: a £1 coffee at Café Nero every week. That saves me £2.60 a week on a coffee I would buy anyway, at the chain I think serves the best cup of coffee, just a few minutes from the office.
That’s a saving of £11.40 per month, which is almost the same as my monthly contract. I look at it like I pretty much have a free mobile contract now.
It’s also a big saving on my previous monthly contract, and I’m now investing that £35 a month into something useful – a regular savings account paying 6.5 per cent at Nationwide.
This time next year I’ll put it towards the cost of Christmas, and it’s nice to feel the benefit of taking a few minutes to find a Sim-only deal.
It’s vital that you stay up to date with all your contracts and invoices – telecom companies rely on a group of people who are too lazy or forgetful, forcing them to pay much more than necessary for months… or even years .
Don’t let it be you. And don’t let it be your loved ones either, it might be worth helping the most vulnerable members of your family or friends do an audit of all these different costs that can be easy to lose track of.
*This year I have noticed that many providers are trying to push us towards 36 and 48 month offers, making them seem cheaper; they are not. They seem cheaper as the total amount is spread over a longer period of time. Do your research before taking the plunge.
PS: Broadband and TV companies aren’t immune to joining the Black Friday sales frenzy and while you have to be careful what you sign up for, there are some good genuine deals out there. Try our broadband and TV comparison tool to find out.
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