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nigel woollsey

Nigel Woollsey

Online Writer
Published: 03/09/2020

At a glance

  • More than nine out of 10 people in the UK now own or use a mobile phone.
  • Not everyone wants or needs a top of the range smartphone – there’s plenty of choice for those looking for a cheap, basic mobile phone too.
  • Choose from Pay Monthly, Pay As You Go or SIM Only deals.
  • Pay for your new mobile upfront or by affordable monthly payments.
  • Many deals include allowances for free call minutes, text message and mobile internet data per month – quite a few even offer unlimited usage.

Why do I need a mobile phone?

The majority (95%) of households in the UK own a mobile phone, according to data published by Statista. Consequently, mobile phones are regarded as a ‘must-have’ item for the majority of people. Meanwhile, those aged 55-64 are less likely to have a mobile phone, with 70% owning a smartphone in 2020.

So why do so many people find a mobile phone essential?

One of the most basic benefits of owning a mobile phone is that you are able to make and receive phone calls virtually wherever you are. Mobile phone coverage now encompasses most of the UK, so the ability to stay in touch while at home or out and about – especially to make emergency calls – is a major benefit for people of any age.

Of course, nowadays, mobile phones (especially smartphones) can do a lot more than just make phone calls. Even basic mobile phones enable you to send text messages and read your email. More advanced versions can do a lot more than this, including allowing you to bank online, listen to music, take photos and video, watch streaming video or a myriad of other tasks.

It’s for these reasons that many people consider a mobile phone as an essential piece of technology rather than just a ‘nice to have’ gizmo.

What types of mobile phone are there?

For those who aren’t familiar with the world of mobiles and smartphones, the terminology (as well as the technology) can be a bit intimidating – but don’t worry, there are just two main types of mobile phones that you need to know about:

  • Basic mobile phones (also sometimes called feature phones)
  • Smartphones.

Basic mobile phones
If all you’re worried about is making phone calls and sending the odd text message, then a basic mobile phone is just what you need. These are robust, compact units, with clear, uncomplicated keypads (if you are someone who struggles with using tiny keys, there are mobiles with larger buttons). Bells and whistles are typically limited to a clock, alarm and calendar and maybe a basic camera on a few more advanced models.

These are a great choice if you are looking for a simple and cheap first mobile phone or just want something you can pop in a pocket in case of emergencies.

These are highly versatile pieces of technology that, in addition to being able to make voice and video calls, have much of the operational functions of a personal computer. Able to access the internet and run a host of apps, these often also have a high-quality digital camera suitable for taking photos or video and have all the functionality of an MP3 music player. Smartphones also feature touchscreen technology and many also allow for voice control.

There are three main operating systems in the market: Android (from Google), iOS (Apple) and Windows Phone.

Smartphones are typically much more expensive than basic feature phones but can do far more. However, there is a wide range of models on offer, with cheaper, entry-level smartphones available for those who don’t need ‘top of the range’ functionality.

What are ‘apps’?

‘Apps’ is short for applications – basically self-contained computer programmes that can be downloaded to your smartphone. There are literally hundreds of thousands of apps available able to carry out a huge number of tasks, including turning your phone into a GPS navigation system, control your smart TV, play games, bank online, view streaming videos, listen to podcasts, see the weather forecast and shop online to name just a few. If you can think of a task or subject, then there’s very likely to be a specific app available!

Apps can be free or you may have to pay a small fee for full usage.

What kind of mobile phone contract should I choose?

Essentially, there are three basic types of mobile phone contract:

  • Pay As You Go (PAYG)
  • Pay Monthly (PAYM)
  • SIM Only (SIMO)

PAYG and PAYM deals provide you with a new phone, while SIM Only deals are for those who already own a mobile phone.

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Pay As You Go (PAYG)

This option has no monthly fixed fees, instead, you pay in advance for any calls, texts or data you use. This is called ‘topping up’ and can be easily done online with credit normally being bought in £5 or £10 increments. Once the credit you have paid for runs out, you’ll have to top up again in order to use your mobile phone.

This a great option for people who will likely have only light usage. Credit lasts until you use it all, so if you don’t use the phone, then you won’t be charged anything. There’s no monthly charge and no direct debit arrangement. PAYG contracts are not credit agreements, so you won’t have to pass a credit check when you apply.

The only downside is that call, text and data charges tend to be a bit higher than those available for Pay Monthly deals.

Pay Monthly (PAYM)

These are the most popular choice for those looking to get a smartphone. You pay a minimum monthly sum on a credit agreement toward the cost of your new phone, along with a payment for a set monthly allowance for calls, texts and data. The contracts are fixed for a certain time – normally between 12 months up to five years. When this contract ends, you will have paid for your phone and your monthly payment will drop to cover just the calls, texts and data elements.

For example, let’s say you have a PAYM deal for £15.99 a month fixed for 24 months. Of that, £9.99 goes toward repaying the cost of your new smartphone and the remaining £6.00 pays for your monthly call, text and data allowance. Providing you keep up with your repayments, after 24 months your phone has been totally paid for and your monthly payment will fall to just £6.00 a month to cover your usage allowance.

Once your contract ends, you are free to either stay with the lower payments or look for a new fixed deal (and a new phone if you want) elsewhere.


This is for those who already own a mobile, aren’t interested in a new one and are just looking for a new deal for calls, texts and data.

These tend to be the most competitive in terms of price and monthly allowances. Just as with a Pay Monthly deal, this is a contract for a set period for which you pay a monthly fee. Again, once the contract ends, you are free to seek a new deal with the same provider or go elsewhere.

A word about call, text and data allowances

Mobile phone contracts (not Pay As You Go) will provide you with a monthly allowance, which is included in the monthly fee. These are normally quite generous but if you go over these limits, then you can expect to be charged extra.

Returning to our example of a £15.99 Pay Monthly contract, you could have an allowance of 1,000 mins for calls, 1,500 texts and 2GB of data per month. This means you can make nearly 17 hours’ worth of calls, send up to 1,500 ordinary text messages and download up to 2 Gigabytes worth of data from a 3G or 4G mobile network each month (however, there is no limit to the amount of data you can use if your phone is connected to the internet via a Wi-Fi source).

Often sending a picture with a text is not included in your allowance and there may be additional charges for calling or using your mobile abroad or to certain premium rate phone lines in the UK.

On the plus side, many mobile phone providers will offer ‘free’ calls to other mobiles on the same network.

What are direct providers and third-party reseller sites?

The mobile phone market isn’t short of providers – all of whom are clamouring for your business!

However, it can be a little confusing if you are new to the world of mobile phones. Basically, there are two types of places to get your new mobile phone: direct providers and third-party resellers.

Direct providers
This includes the big four in terms of mobile providers: EE, Vodaphone, O2 and Three. These will offer both new and refurbished mobile phones that are locked to their network only. For example, you won’t be able to find a deal for the EE network if you go direct to O2, etc.

Direct providers also cover mobile phone providers who ‘piggyback’ their service to one of the main four networks. These include places like Tesco Mobile and Giffgaff.
All direct providers will offer good deals with an excellent choice of handsets and contracts.

The only slight disadvantage is that you won’t be able to see if another mobile provider has a better deal for the mobile and/or allowance package you want.

Third-party resellers
Again, these offer both new and refurbished mobile phones but act as comparison sites, with deals from two or more of the direct providers. Third-party resellers are therefore great if you don’t prefer a particular mobile phone provider and are just looking for the best deal on a particular type of mobile or smartphone. Third-party resellers include vendors such as Carphone Warehouse and Uswitch.

While they do have an excellent selection of both deals and handsets, third-party resellers may not carry deals from all direct providers – in which case you’ll need to check these yourself.

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How much does a mobile phone deal cost?

There is a staggering amount of good mobile phone deals out there – meaning you can more or less get a pay monthly contract for as little as just £7.50 per month, with nothing to pay upfront.

Alternatively, if you are in the market for the latest, top of the range smartphone, you can easily find a deal that will have your new phone winging it’s way to you with next-day delivery.

Set a budget for yourself and then find out what you can get for that price – odds on there’ll be a deal that matches what you’d like to pay each month.

For those who have a lump sum to spend, you might consider buying your new mobile outright and then paying for a much cheaper SIM Only deal or even a Pay as You Go arrangement.

What do I need to think about when considering a mobile phone deal?

This question could be an entire guide in itself, but there are a few basics to keep in mind:

The phone

There are five basic elements to consider when you are thinking about a new mobile:

  • Battery life – How long will your new mobile last from fully charged while you are making calls or just turned on? Try to find the best battery life you can in your price range.
  • Screen – For smartphones especially, you’ll want a clear, bright screen with a decent resolution if you are going to be staring at it for most of the day. 
  • Features – Do you really need a camera or is that just a nice to have? 
  • Storage size – If you are planning on storing lots on your mobile – especially when it comes to music, downloaded videos and apps, then get a mobile that has the internal storage to cope.
  • Processor – Just as with a PC or laptop, this is the ‘brains’ of the mobile. The faster the processor, the better your smartphone will be at handling multiple tasks at once.


As mentioned above, you won’t find that the mobile phone market is short on deals. Competition in the marketplace has driven costs down to the point where you can pick up a new mobile for not very much per month.

However, be realistic about your needs and what you can comfortably pay – either upfront and/or per month. Longer contracts will reduce the price but mean that you’ll end up paying more in terms of interest.

Many providers now offer pre-owned ‘refurbished’ mobiles and smartphones, which cost less than a brand-new model and will have been professionally checked and serviced before being resold.


While overall mobile coverage of the UK is very good, you may find that a particular provider has a better network connection for where you live. Check out online the local 3G and 4G coverage in the area where you live/work to make sure you aren’t in a mobile phone blackspot with zero reception!


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What if I’m declined for a mobile phone contract?

Pay Monthly mobile phone deals operate just like a credit agreement. Therefore, you will be credit checked as part of the application process. If your credit rating is poor, you may well be declined.

You may have a better chance of being accepted on a SIM Only monthly deal, as these don’t include a new mobile. Alternatively, use an old handset or buy a new handset outright and then get a Pay As You Go deal.

If you are worried about being refused a mobile phone deal, you can check your credit score quickly using our free credit check. In addition, this credit report won’t show on your credit history.

For those who already have a poor credit score, why not check out our helpful guide on 8 ways to improve your credit score.

Mobile internet vs. broadband

Are you confused about mobile internet, broadband and Wi-Fi? Our beginners guide to broadband explains all without all that technical mumbo-jumbo. In addition, you can find out which broadband providers have earned a Moneyfacts Five or Four-Star Rating.

Moneyfacts tip

Moneyfacts tip nigel woollsey

Always do your homework before taking on a new mobile phone deal – there’s a wealth of choice out there for mobile phones, smartphone and airtime deals, so make sure you are getting what you want at the best price.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

person looking at phone

At a glance

  • More than nine out of 10 people in the UK now own or use a mobile phone.
  • Not everyone wants or needs a top of the range smartphone – there’s plenty of choice for those looking for a cheap, basic mobile phone too.
  • Choose from Pay Monthly, Pay As You Go or SIM Only deals.
  • Pay for your new mobile upfront or by affordable monthly payments.
  • Many deals include allowances for free call minutes, text message and mobile internet data per month – quite a few even offer unlimited usage.

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