Consumers are continuing to pay for handsets already paid for by not upgrading
Almost a quarter (22 per cent) of UK monthly mobile subscribers are paying the same monthly bill for more than two years after signing up.
This is according to research from price comparison website uSwitch surveying 2,002 adults between March 3 – 6, 2017.
Contracts are split in cost to pay for the device itself and tariff included. By continuing to pay the same amount after the agreed time, users are paying for a handset that’s already been paid in full. The average time consumers are overpaying on their contract is six months.
Subscribers can of course opt to lower monthly payments at the end of contracts. The research found 30 per cent don’t know when their contract is up for renewal – and are at risk of overpaying.
Currently 44 per cent of subscribers are locked into a contract with a handset included, amongst 18-34 year olds this figure rises to 55 per cent. 16 per cent of over 55s have been in the same contract for more than three years, with 33 per cent not knowing when their contract is up for renewal.
The most popular handsets for a pay monthly deal are the iPhone 6s and Samsung Galaxy S7, both costing north of £500 pre-paid. Almost half (48 per cent) said they could not afford to buy a handset outright if they want to.
Peace of mind
Operators such as O2 and Tesco Mobile split bills separately, one for handset and one for tariff. According to uSwitch telecoms expert Ernest Doku, this offers consumers “peace of mind” but allowing people to downgrade to just data and airtime, is not always the cheapest option.
“This type of premium contract has a sting in the tail for those happy to hang onto their handset that bit longer. Paying ‘Refresh’ rates just for airtime and data instead of swapping to a straightforward SIMO and teaming it with your handset means you’ll likely be paying over the odds for that airtime and data”, said Doku.
“Pay monthly isn’t the only way to afford a brand new phone. Buying a phone outright on an interest free credit card, and paying off the handset before the APR goes up, could be an alternative.”