SIM-Only vs Contract 2026: Real Savings + How to Switch

Here's a question worth real money: did your phone contract end months ago — and are you still paying the same bill? Millions of UK customers keep paying handset-bundle prices long after the handset is paid off. That's the loyalty penalty, and it's the easiest £200–£300 a year you'll ever claw back. This guide does the actual maths on SIM-only versus contract, then walks you through switching — PAC codes, STAC codes and eSIMs — step by step.

The loyalty penalty: what happens when your handset contract ends

A typical handset contract bundles two things into one monthly payment: the cost of the phone, spread over 24 or 36 months, and the airtime (your data, calls and texts). The trap is what happens at the end. When the phone is fully paid off, most providers don't automatically drop your bill — you keep paying the bundled price for a handset you now own outright.

Ofcom research has found that buying a handset separately and pairing it with a SIM-only deal works out around 23% cheaper on average than getting the same phone through a bundled contract (Ofcom analysis, December 2023). The gap is biggest in the months after your contract ends, when every pound of the "handset" portion of your bill is pure overpayment.

The 24-month maths: contract vs buying the phone + SIM-only

Let's compare two honest routes to the same outcome — a current flagship phone and unlimited data for two years. Prices below are illustrative of the June 2026 market; check live phone deals and current SIM-only prices for today's exact figures.

Three things jump out:

• Even buying the flagship outright beats the bundle over 24 months — and you own the phone from day one, so you can sell or trade it whenever you like.
• If your current phone still does the job, SIM-only is in a different league: around £240 for two years of service versus £1,300+.
• The often-quoted benchmark saving for moving from an expired handset contract to SIM-only is roughly £300 a year — consistent with the gap in the table above.

How cheap is SIM-only in June 2026?

The SIM-only market is fiercely competitive. As a snapshot of the current landscape:

• £5–£8 a month — entry plans with around 5–20GB of 5G data from MVNOs like Lebara, giffgaff and Smarty.
• £10–£12 a month — generous mid-tier allowances (50–100GB+), often with EU roaming included.
• From around £15 a month — genuinely unlimited data on several networks.

Most SIM-only deals are 1-month or 12-month terms, so you're never locked in for long — and 1-month rolling plans let you renegotiate or jump ship whenever a better offer appears. Compare today's SIM-only deals here.

Step 1 — Keep your number: text PAC to 65075

Switching networks doesn't mean losing your number. The PAC (Porting Authorisation Code) process is free, fast and regulated by Ofcom:

1. Text "PAC" to 65075 from the phone you're switching. Your current network must reply within one minute with a 9-character code, plus details of any early termination charge.
2. Sign up for your new SIM-only deal and give the new network your PAC code (there's a box for it during checkout, or you can submit it after).
3. Your number transfers — usually within one working day of the new network receiving your PAC. The code stays valid for 30 days; if it expires, just text for a new one.

Your old contract ends automatically when the port completes. No awkward retention calls required.

Step 2 — Or start fresh: text STAC to 75075

Don't want to keep your number? Text "STAC" to 75075 instead. A STAC (Service Termination Authorisation Code) cancels your old service when you join the new network, without porting the number. Same one-minute response, same 30-day validity.

And before you do either: text "INFO" to 85075. Your network must reply with your contract status and any exit fees — so you'll know whether you're free to leave before you commit to anything.

eSIM switching: same-day moves with no plastic

Most current handsets (iPhone XS and later, recent Samsung Galaxy and Google Pixel models) support eSIM — a digital SIM you activate by scanning a QR code or through the network's app. For switching, eSIM is a game-changer: no waiting for a SIM card in the post, so you can go from sign-up to active service the same day.

Two gotchas worth knowing:

• Switching network AND phone at the same time? Activate the new eSIM on your new phone, not the old one. eSIMs don't physically move between devices — transferring one usually means requesting a fresh QR code or using the network's transfer flow, which is an extra step people don't expect.
• Porting still applies. An eSIM changes the plastic, not the process — you still text PAC to 65075 to bring your number across.

Which network will my new SIM actually run on?

Many of the cheapest SIM-only brands are MVNOs — virtual operators running on one of the big networks. Coverage is identical to the host network, so check the host's coverage at your postcode before you buy:

When does a handset contract still make sense?

To be fair to bundles, there are cases where contract deals win — and knowing them stops you switching for the wrong reasons:

• Genuine 0% spread with a discount. Networks sometimes run promotions where the bundled price, totalled over the term, beats buying outright — typically on last year's flagship or during launch windows with big trade-in boosts. The only way to know is to total both routes over the full term, exactly as in the table above. Never compare monthly prices; compare 24-month totals.
• You can't or don't want to pay upfront. Spreading £900 over two years has real value if a lump sum isn't practical. Just make a note of your contract end date the day you sign — that's the day your bill should drop or you should switch.
• Trade-in stacking. If your old phone has strong trade-in value and a network is offering an inflated trade-in bonus, the effective bundle price can dip below the outright route. Run the numbers including what you'd get selling the old phone privately.

What never makes sense: staying on the full bundled price after the minimum term. If you remember one thing from this article, make it that.

Before you switch: a five-minute checklist

1. Text INFO to 85075 — confirms your contract status and any exit fee.
2. Check coverage at your postcode on the host network's checker (see the MVNO table above) — especially indoors, where networks differ most.
3. Audit your data use in your network's app. Most people overbuy: if you've never exceeded 15GB, an unlimited plan is money down the drain. Buy your real usage plus headroom.
4. Note your perks. Bundled extras (streaming subscriptions, EU roaming allowances, hotspot limits) vary — check the new plan covers what you actually use. EU roaming in particular is free on some networks and £2+/day on others.
5. Unlock check. Phones sold since December 2021 must be sold unlocked, but older handsets may need a free unlock from your current network before another SIM will work.

Frequently asked questions

Does switching networks affect my credit score?

A SIM-only plan paid monthly may involve a soft or full credit check depending on the network, but switching itself doesn't harm your score. Pay-as-you-go and most rolling 1-month plans involve no credit check at all.

How long does porting my number take?

Once your new network has your PAC, the port normally completes the next working day. Your old SIM keeps working until the moment of transfer, so you're never cut off.

Can I switch if I still owe money on my handset?

Yes, but the outstanding handset balance (or early termination charge) becomes payable. Text INFO to 85075 to get the exact figure — then do the maths. If the new deal saves more than the fee costs, switching early can still win.

Will my old eSIM stop working when I switch?

Yes — when your number ports, the old network's eSIM profile deactivates. You can delete it from your phone's settings afterwards. Keep it installed until the switch completes so you don't lose service mid-port.

Is 5G included on cheap SIM-only deals?

Almost always now. Even £5-a-month plans from the major MVNOs include 5G at no extra cost — you just need a 5G handset and 5G coverage in your area. Speeds on MVNOs can be deprioritised at peak times versus the host network's own customers, but for everyday use most people never notice the difference.

Prices reflect the UK SIM-only market in June 2026 and move frequently — check live deals for current figures. PAC/STAC/INFO shortcodes are Ofcom's industry-wide text-to-switch scheme and work on all UK networks.