Mobile phone or SIM-Only mobile contracts normally have a 12 or 24-month contract. Although with some of the latest Apple iPhones, we’ve even seen some 36-month contracts!
For the duration of your contract you will need to pay a fixed amount to your network each month. But what happens if you see a better offer? Or if you want to get a new phone on another contract? Unfortunately, you will most likely have to pay a “early termination charge” or “early exit fee” if you want to end your contract before the last bill is due. This can be the total of the money that you owe, based on the full length of the contract, but sometimes it can be less than that. Depending on how long your contract still has left to run, it can be a sizeable fee, and should definitely be thought about when switching to a new network.
30 days notice?
Sometimes, even if your contract has expired, and you want to switch to another, cheaper, network, you will be expected to give 30 days notice. This can mean that you’re paying for 2 networks at the same time. Ofcom has done a lot of investigations into this and has made recomendation for the networks to follow. These should reduce the possibility of double-paying, but for now, our best advice is to speak to your current network and if they have a notice period, ask them if they would be willing to scrap it for you.
Costs of leaving your network
In this article we will look at what it costs to switch mobile networks; e.g. what are you likely to pay if you cancel your contract early. We will go through each network in turn, and then provide some other solutions which may be cheaper for you.
Early Termination Fees: By Network
The total charge that you will have to pay for leaving your contract will normally depend on how far into the contract that you are. If you have paid for 23 months of a 24 month contract then you can not be expected to pay the same amount as someone who is 2 months into the same contract. Different network also have different discounts, so it’s not always a flat calculation of months left multiplied by the monthly bill.
O2 has a contract called The O2 Refresh plan, where the cost of the device is listed separately (Device Plan) from the cost of any data or texts(Airtime Plan). This means that if you want to switch devices, but stay with O2, you can just pay off the remainder of the Device Plan, get a new device and continue to pay the Airtime Plan.
If you are not on the O2 Refresh plan, for example if you got your O2 contract through a company like mobiles.co.uk or Carphone Warehouse, then you will probably be on a standard 24-month contract. In that case, you will have to pay an early termination fee, which depends on the amount of time left on your contract. You will need to check with O2 customer services to see how much you have left to pay. You can do that by phoning 202 on your O2 handset or 0344 809 0202 from any other phone.
Source: O2 Help & Support: Leaving O2
Tariff Information: O2 Website
If you want to terminate a contract early on EE, you will need to pay an early termination charge (ETC). EE discount the total amount left by the current VAT rate, and then they reduce it by another 4%.
On the EE websites they have these 2 examples:-
You have a monthly recurring plan for £30 a month, with three months left. We multiply £30 by three, totalling £90, and take VAT off that figure, leaving it at £75. Finally, we take 4 per cent off that figure, making your final Early Termination Charge (ETC) £72
If you have already fulfilled the minimum term of your contract then EE will expect you to serve a 30-day notice period.
You can cancel your EE contract by calling 150 on your EE handset, or by submitting your request online.
Vodafone has a 30-day network guarantee, which means that if you want to leave your contract in the first 30 days, you can do so for free.
However, if you’ve been in a Vodafone contract for more than 30 days then you will need to pay an “early termination fee”. Vodafone reduce the amount by deducting VAT at the current rate and then apply a 2% discount to any outstanding fees. Based on the current VAT rate of 20%, this means that works out to be nearly 82% of your remaining monthly payments. The formula for calculating the early termination fee is detailed in the Vodafone Terms & Conditions:
This is what they say:-
Early termination fee: If you cancel a contract for your plan before your agreement ends, you’ll need to pay an early termination fee. The fee is based on your monthly plan charge and the remaining time left on your contact, and can be calculated as follows:
Monthly line rental charge (exc. VAT) X remaining contract (months) X 98%
If you want to get the latest costs that apply to your plan, contact Vodafone Customer Services by calling 191 on your Vodaphone handset or 03333 040 191 from another phone. You can also speak to a Vodafone adviser online
Three has a pretty long and details Pay Monthly price guide, which covers all their charges and fees. On page 24, it has the Cancellation Fee, which is payable by people who leave their contract early.
This is what it says just now (Feb 12, 2019)
Cancellation Fee: Lump sum equivalent to the total of the Monthly Charges remaining during the Minimum Term of your agreement less a variable discount, currently 20%. We reserve the right to vary the amount of the percentage discount from time to time.
Source: Three Pay Monthly Price Guide
Tariff Information:Three Website
Alternatives to Cancelling Early
As you can see, each network has cancelattion fees, and depending on how far into your contract you are, it can be very expensive. So, where possible, we’d really recommend that you don’t cancel your contract before it has finished. Here are some alternative ideas that might help you.
Change your phone, not your contract
If you are not happy with your current handset. Maybe it has broken, or you’ve lost it? Maybe you just want the latest model from Apple or Samsung. You can buy an unlocked phone from a number of retailers, including Carphone Warehouse, John Lewis and Mobiles.co.uk
Get an Unlocked Phone
In order to make sure that you have the most options with your new phone, look for ones that are listed as SIM-free or unlocked. This means that it will work with your current SIM, but if you do decide to switch networks at the end of your contract, it should also work with that network too.
Once you have the new phone, you can put your existing SIM-card into this and continue to use your current contract. There will be no early termination fees. It might be that your existing SIM-card is the wrong size for your new phone, but speak to your network. In most cases they will send you a new, correct sized, SIM card for free.
Buying a smartphone outright, instead of in a contract, might seem expensive. The latest models of Apple’s iPhone, Samsung’s Galaxy or Google Pixel all cost between £800 and £1000. This is a lot of money to spend upfront. But it’s nearly always the cheapest way to buy a smartphone.
Do you have poor coverage?
Are you thinking of changing networks because the coverage is poor? Before you do that I would recommend that you speak to your mobile network. It might be that there is a temporary problem, for example a mobile mast might be experiencing problems or going through maintenance. The network should be able to offer you solutions for the poor coverage. They will want to keep you from leaving, so they might even offer you accessories that can help with coverage. At the very least they should be able to tell you about apps or services that can help. WiFi Calling is one such service. People with poor indoor coverage can use their WiFi signal to make and receive calle.
Leaving the country?
Unfortunately, if you are leaving the country then there’s not much that can be done with regards to the early termination fees. If you’re going to Europe, it might be best to keep your account open. Roaming charges were stopped a couple of years ago for the EU, so if you are going to another EU country, just use your UK phone contract as your normal phone until the contract finishes.
Mobile phone contacts are a type of consumer credit, like a credit card debt. If you are going to have trouble paying the bill then there are lots of agencies who can offer help. The first thing you should do is speak to your network. Tell them about the problems and see if they can help. They might be able to offer other payment arrangements.
Don’t be tempted to just cancel your direct debit, or ignore the bills. If you do that then most likely your account will be passed on to a debt collection agency who will come after you for the money owed. this will negatively affect your credit rating, and make it harder to get credit in the future.
Notice Period Charges
For most Pay MOnthly phone contracts there is also a 30-day notice period. This means that you need to give your network 30 days notice that you want to leave the network. It’s important to remember this, because even if you are outside the contract they will still enforce the 30 days notice period. This makes it almost impossible to switch from one network to another without some period of double paying. That is, one month where you have to pay your old network and your new one.
How To Cancel Your Phone Contract
If you’d like to cancel your contract, you should call the customer services department of your mobile network:
- BT Mobile: Call 150 from your BT handset (or 0800 800 150 from another phone)
- EE: Call 150 from your EE handset (or 07953 966 250 from another phone)
- iD Mobile: Call 7777 from your iD handset (or 0333 003 7777 from another phone)
- O2: Call 202 from your O2 handset (or 0344 809 0202 from another phone)
- Plusnet Mobile: Call 500 from your Plusnet handset (or 0800 079 1133 from another phone)
- Sky Mobile: Call 03300 412 524 from your Sky handset or any other phone
- Three: Call 333 from your Three handset (or 0333 300 3333 from another phone)
- Virgin Mobile: Call 789 from your Virgin handset (or 0345 6000 789 from another phone)
- Vodafone: Call 191 from your Vodafone handset (or 03333 040 191 from another phone)
If you’d like to move your phone number to another network at the same time, make sure to request a PAC Code whilst you’re on the phone.