Why you shouldn't spend more than £8 on a phone contract

Almost everyone now has a phone and uses mobile data, yet many consumers are not taking advantage of the cheap deals and useful perks available, generated by intense competition between mobile networks. 

Estimates suggest 20% to 30% of mobile customers could be out of contract, likely overpaying, and could switch to a different network to make significant savings. Additionally, anyone on a one month rolling deal can simply switch to a better one once it ends.  

If you are tied to a longer contract, make sure you know when it ends so you can start making big savings. Read on to find out why £8 is a reasonable maximum monthly spend for most mobile bills.

See where your provider ranks in our guide to the best and worst mobile networks.

Why most people shouldn't pay more than £8 per month

Mobile networks offer huge amounts of data in their contracts, and despite usage increasing every year, most people don’t actually need so much. Regulator Ofcom reports that the average monthly mobile data use is 9.9GB. 

Our own research found that in the past 12 months, two-thirds of customers use less than 8GB per month, while only a quarter use more than 10GB. This means lots of customers, particularly anyone on a high data contract with a big four network (EE, O2, Three, Vodafone), can make savings by switching to deals of around 10GB. 

Savings will be even bigger if you go with a smaller network, where 10GB or more is readily available for £8 or less. The best deal from the big four we could find was with Three: 12GB for £13 a month on a 24 month contract. 

Some other examples of the prices you would have to pay with these networks:

• EE 25GB for £30 a month (one month contract)
• O2 10GB for £17.99 (24 months contract)
• Vodafone 30GB for £29 (24 month contract)

Remember that all four of these networks increase their prices every April. With switching mobile provider easier than ever, there's no reason to pay more.

Great Sim deals for average data users

In contrast to the pricey offering from the big four, virtual networks offer a huge range of excellent value Sim-only deals. 

And it's not just great value these smaller mobile networks offer – Asda Mobile includes data rollover to allow you to carry unused data to the next month, iD Mobile offers this as well, plus customers get 30GB free EU roaming. Talkmobile users get even more data at a low price, plus 5GB of free EU roaming.

For more ways to cut your monthly costs, read our 10 ways to save money on your mobile phone bill.

How much should I be paying for unlimited data?

Unlimited data is increasingly on offer from mobile networks as part of a contract with a phone, though it's unlikely most people will need so much. Our survey found that only 5% of mobile customers use more than 50GB per month.

But if you need lots of data for streaming or wi-fi hotspotting, then unlimited data may be reassuring. 

Unlimited data from the big four is expensive, particularly if you don’t want your connection speed to be limited. Prices range from £48 a month for Vodafone’s Unlimited Max one month contract, to £25 a month for Three’s Unlimited Value 24 month plan. EE (Unlimited Essentials) and O2 (Unlimited Classic) both offer one month unlimited data contracts for £38 a month.

Keep in mind that the biggest networks all use mid-contract annual price increases, so your bill will go up. Fortunately, there are ways to save here, too.

Great Sim deals for high data users

Once again, smaller networks tend to offer much cheaper deals and many include useful additional perks, such as included EU roaming.

Adam Snook, Which? mobile networks expert says:

'Switching mobile network is often motivated by getting a cheaper price, and that’s very easy to achieve given how many low-cost deals are around. However, switching is also a great chance to bring quality of life improvements alongside savings. I was with a network for around 15 years, then switched twice in about a year. The first time, to get a larger free EU roaming allowance for a long trip I was going on, and the second time to get improved data coverage and connection reliability. Both times I switched, I got a cheaper deal with extra data and received the extra benefits of increased roaming and a more reliable network connection. I’m currently paying £6.95 a month for 15GB – it’s plenty of data for me and very affordable.'

How to get great value in the Sim market

If you use very little data then you may be able to get an even cheaper deal than the ones we’ve highlighted. The savings are quite small at this level though – you can expect to pay as low as £5, or even less if there's an offer for the first few months at a discount. But every little helps, and we do have plenty of options for lower data contracts on our Mobile Compare site. 

In general, our top tips for achieving value and satisfaction when looking for Sim-only contracts are:

• Pick a smaller network, as every year they outperform the big four on our key star ratings such as value for money, customer service and communication quality and frequency
• Look for introductory deals with incredibly low prices for the first three or six months, but make sure the increased price after this time still makes the overall cost worthwhile
• If you struggle with poor signal or data connection, check a mobile network coverage map. You could also try a one month contract with a few different networks and see which is the most reliable in your area
• Don’t get swept away by the perks on offer from the big four, if you don’t actually need or use them, or their value isn’t worth the high price of the contract