What does SIM only and pay monthly mean?
If your contract is ending or you're eligible to upgrade, the main thing to decide is whether you want another mobile phone contract or a SIM only deal. But what do these terms actually mean?
Pay monthly comes with a new handset, while SIM only lets you keep your current phone for a much lower monthly price. So, whether you want a more recent phone or want to save money, here's what you should consider.
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What is a SIM only plan?
A SIM only plan is a deal from a mobile network that gives you calls, texts and a data allowance without the cost of a new handset included.
A SIM only plan is cheaper than a phone contract because your monthly payments don't include the cost of a new handset.
Switching to SIM only plan is a great way to cut down your costs. If you’re happy with your current handset, there’s no need to keep paying the same rate once your contract is up. Many networks will then switch you automatically to a SIM only plan, but be sure to double-check your account or check and compare plans online to see if you're getting the best deal.
What is a SIM only contract?
When you sign up for a SIM only plan, you still sign up for a contract with your chosen network. While many SIM only plans are rolling 30-day plans, which you can cancel at any time, you can also get better monthly rates if you sign up for a longer contract.
With shorter contracts, there’s usually no need for an in-depth credit check, which makes SIM only a really good option for quickly getting your hands on a decent plan with no fuss or commitment.
What is a pay monthly plan?
Even though SIM only plans are also charged monthly, 'pay monthly' usually refers to a mobile phone and SIM contract. If you opt for a pay monthly mobile contract, you'd be paying off your handset monthly, compared to no handset charge at all.
When you sign up for a pay monthly plan, you generally commit to either 12 or 24 months. You’re committed to paying a set amount of money every month until the contract is paid off.
This fee will change depending on what you get with your contract. You’ll usually receive a set number of calls, texts, and data, as well as phone calls. But your cost mainly depends on how expensive your chosen phone is.
For instance, the iPhone 16 currently costs £799 without a contract, but you can get one for less if you sign up for a pay monthly plan.
If you choose a phone that costs less, the contract will usually have a lower monthly cost. The latest iPhone 16e is even cheaper, retailing at £599. But of course, that’s still a significant amount of money for most of us. On a pay monthly plan, you can get the iPhone 16e for around £20 a month.
SIM only vs mobile contract: which should I choose?
Here are the main things to keep in mind when deciding between a mobile pay-per-month contract and a SIM only plan.
Mobile contract
You can choose a new & improved phone
Good for your credit score
SIM only
More sustainable (less waste)
Usually much cheaper
Often no credit check required
Why choose a SIM only plan?
A SIM only contract has many benefits compared to a pay monthly; however, there are still a few key factors to consider when working out if it's the right choice for you:
Affordable: SIM only plans are usually cheaper than traditional phone contracts since you’re not paying for a new device alongside your minutes, texts, and data. If saving money on your monthly bill is a priority, a SIM only would suit you.
Get to keep your existing phone: If you already own a phone from a previous contract and you would love to keep using it, a SIM only deal is ideal. You can continue using your current device and avoid upgrade costs.
Value for money: SIM only plans often offer great value, especially since calls and texts are typically cheaper, meaning data usage is the primary cost. If you have WiFi at home, you might not need much data, allowing you to find an excellent deal.
Flexibility: You are not tied to a phone contract and can switch devices whenever you like. You can purchase the latest phone outright, insert your SIM, and continue using your SIM only plan.
Environmental impact: Choosing a SIM only deal also reduces e-waste. By reusing your current phone, you're helping to minimise the 155,000 tonnes of electrical waste discarded by UK households annually.
What is an eSIM?
An eSIM is a digital version of a SIM card that's built into your phone, allowing you to connect to a mobile network without needing a physical card. It lets you activate a plan directly on your device, store multiple eSIMs, and use two numbers at once.
An esim makes opting for a SIM only plan even easier because you don't need to wait for a new SIM to arrive; you can simply download and use it.
Unlike traditional SIMs, eSIMs cannot be removed or transferred. They are growing in popularity, especially for travel, and may soon become the standard as physical SIM cards are phased out.
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FAQs
What is a SIM only plan?
A SIM only plan is a package from your mobile network that includes calls, texts and data but not the cost of a handset.
What is a Pay as you go SIM?
A Pay as you go SIM is a flexible plan that lets you pre-pay for calls, data and texts as and when you need them. There is no contract.
What is a data only SIM plan?
Data-only plans are typically used for devices other than smartphones, such as tablets, smartwatches, and mobile Wi-Fi devices. They don't provide you with a phone number and are just used to access the internet.
