Almost a quarter of us are still paying our phone contracts more than two years after signing up, meaning we've already more than paid for our phones and are now just chucking money away.
The price of the handset you get at the beginning of your contract is built into the monthly cost, and designed so that you pay for the whole handset over the term of the contract (12, 18 or 24 months). If you keep paying that monthly cost past the end of your contract, you're still paying the handset cost when you've already more than covered it. You might even have paid it twice over.
The data comes from a new USwitch study, which found that:
- 22% of pay monthly (contract) mobile customers are still paying the same bill more than 2 years later – that's about 3 million people overpaying
- 30% don't know when their contract ends
- 27% of 18-34s are pretty sure their contract's already finished
- 43% of everyone surveyed said they haven't even thought about getting a better deal after the end of their contracts.
Not everyone's doing things this way, though. Increasingly, people are buying their handset outright and just paying for their phone and data use with a sim-only deal. Low-cost providers like OnePlus and GiffGaff have spurred this trend.
uSwitch telecoms expert Ernest Doku has some good advice:
"This problem with ‘double paying’ for out-of-contract phones needs to be addressed. Pay monthly mobile users need to be aware of the exact contract length they’re signing up to. That way, they’ll know exactly when the handset they ‘bought’ will be paid off by.
Some networks such as O2 and Tesco Mobile split bills separately: one for tariff and one for handset. This means handset bills can be reduced accordingly, giving peace of mind to the consumer. However, this type of premium contract has a sting in the tail for those happy to hang onto their handset that bit longer. Paying ‘Refresh’ rates just for airtime and data instead of swapping to a straightforward SIMO and teaming it with your handset means you'll likely be paying over the odds for that airtime and data.
Pay monthly isn’t the only way to afford a brand-new phone. Buying a phone outright on an interest free credit card, and paying off the handset before the APR goes up, could be an alternative."
If you're out of contract but you're happy with your current phone, for goodness' sake switch to SIM-only. Especially if you're one of the people also overpaying for your broadband.
We're a stubborn bunch.
Main image: Jeshoots