SIM Only vs Contract in 2026: The Real Savings and How to Switch

Yes, you are almost certainly overpaying if your handset contract has already ended. If your phone contract finished months ago and your bill has not moved since, you are paying a handset price for a phone you already own outright. That gap has a name, the loyalty penalty, and it is worth £200 to £300 a year to almost anyone still sitting in it. This guide runs the real 24 month maths on SIM Only vs Contract, then walks through exactly how to switch, PAC codes, STAC codes, and eSIM, in under an hour.

What the loyalty penalty actually is

A handset contract bundles two separate costs into one monthly figure: the phone itself, spread over 24 or 36 months, and the airtime covering your data, calls, and texts. The catch sits at the finish line. Once the phone is fully paid off, most networks do not automatically lower your bill; you keep paying the bundled price indefinitely for a handset you now own outright.

Ofcom's own research found that buying a handset separately and pairing it with a SIM only deal comes out around 23% cheaper on average than getting the same phone through a bundled contract. That gap is largest in the months right after your contract ends, when every pound of the handset portion of your bill has become pure overpayment with nothing left to pay off.

The 24 month maths: contract versus buying the phone plus SIM only

Compare two honest routes to the same outcome, a current flagship phone with two years of unlimited data. Figures below reflect the June 2026 market; check live phone deals and current SIM only prices for today's exact numbers.

 Three things stand out once the totals are lined up side by side:

1. Even buying the flagship outright beats the bundle over 24 months, and you own the phone from day one, free to sell or trade it whenever suits you.

2. If your current phone still does the job, SIM only sits in a different league entirely: around £240 across two years of service against more than £1,300 through a bundle.

3. The commonly quoted saving for moving from an expired handset contract onto SIM only, roughly £300 a year, matches the gap shown in the table above almost exactly.

How cheap is SIM only right now

The SIM only market in June 2026 is genuinely competitive across every budget:

• £5 to £8 a month: entry plans with roughly 5GB to 20GB of 5G data from MVNOs including Lebara, giffgaff, and Smarty.

• £10 to £12 a month: generous mid tier allowances of 50GB to 100GB or more, often bundling EU roaming.

• From around £15 a month: genuinely unlimited data on several networks.

Most SIM only deals run for one month or twelve months, so you are never locked in for long, and a rolling one month plan lets you renegotiate or jump to a better offer whenever one appears.

Step one: keep your number by texting PAC to 65075

Switching networks does not mean losing your number. The PAC, or Porting Authorisation Code, process is free, quick, and regulated by Ofcom across every UK network.

1. Text 'PAC' to 65075 from the phone you are switching. Your current network must reply within one minute with a nine character code, along with details of any early termination charge.

2. Sign up for your new SIM only deal and hand the new network your PAC code, either during checkout or shortly after.

3. Your number transfers, usually within one working day of the new network receiving the PAC. The code stays valid for 30 days; if it lapses, simply text for a fresh one.

Your old contract ends automatically the moment the port completes, so there is no awkward retention call required on your part.

Step two: start fresh by texting STAC to 75075

If you would rather leave the old number behind, text 'STAC' to 75075 instead. A STAC, or Service Termination Authorisation Code, cancels your old service the moment you join the new network without porting the number across. It carries the same one minute reply time and the same 30 day validity as a PAC.

Before committing to either route, text 'INFO' to 85075. Your network is required to reply with your current contract status and any exit fee, so you know exactly where you stand before you sign anything new.

eSIM switching: same day moves with no plastic involved

Most current handsets, including iPhone XS and later plus recent Samsung Galaxy and Google Pixel models, support eSIM, a digital SIM activated by scanning a QR code or through the network's app. For switching, this removes the wait entirely: no card in the post, so you can go from signing up to an active service the same day. Full detail on how the technology works sits in our eSIM explainer.

Two things worth knowing before you activate one:

• Switching network and phone together: activate the new eSIM on the new phone, not the old one. eSIM profiles do not move between devices on their own; transferring one usually means requesting a fresh QR code or using the network's dedicated transfer flow, an extra step people rarely expect.

• Porting still applies: an eSIM changes the plastic, not the process. You still text PAC to 65075 to bring your number across regardless of which SIM format you land on.

Which network is your new SIM really running on

Many of the cheapest SIM only brands are MVNOs, virtual operators running on one of the big four networks. Coverage matches the host network exactly, so check that network's coverage at your postcode before buying, not the MVNO's own marketing map.

 When a handset contract still genuinely wins

To be fair to bundles, three specific situations tip the maths back in their favour, and knowing them stops you switching for the wrong reasons:

1. A genuine 0% spread with a real discount. Networks occasionally run promotions where the bundled price, totalled over the full term, beats buying outright, typically on last year's flagship or during launch windows with large trade in boosts. The only way to know is to total both routes over the full term exactly as above; never compare monthly prices alone.

2. Paying upfront is not realistic. Spreading £900 across two years has real value if a lump sum is not practical right now. Just note your contract end date the day you sign, since that is the day your bill should drop or you should switch.

3. Trade in stacking. If your old phone carries 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 would get selling the old phone privately before assuming the network's offer wins.

What never makes sense is staying on the full bundled price after the minimum term ends. If you take one thing from this guide, make it that.

Before you switch: a five minute checklist

1. Text INFO to 85075 to confirm your contract status and any exit fee.

2. Check coverage at your postcode on the host network's checker, especially indoors, where networks differ the most.

3. Audit your real data use in your network's app. Most people overbuy; if you have never gone over 15GB, an unlimited plan is money left on the table. Buy your real usage plus a sensible margin.

4. Note your current perks. Bundled extras such as streaming subscriptions, EU roaming allowances, and hotspot limits vary widely, so check the new plan actually covers what you use. EU roaming in particular runs free on some networks and over £2 a day on others.

5. Run an 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. If you ever need it, our PUK code guide covers the related unlock codes step by step.

A mobile switch is also a natural prompt to check the rest of your household connectivity. If you rely on a mobile dongle or MiFi for backup internet, or you have not compared broadband deals in a while, both are worth ten minutes at the same time.

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 the act of switching itself does not harm your score. Pay as you go and most rolling one 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 right up until the moment of transfer, so you are never left without service.

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 for the exact figure, then run the maths; if the new deal saves more than the fee costs, switching early can still come out ahead.

Will my old eSIM stop working when I switch?

Yes. When your number ports, the old network's eSIM profile deactivates, and you can delete it from your phone's settings afterward. Keep it installed until the switch fully completes so you do not lose service mid port.

Is 5G included on cheap SIM only deals?

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

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