iPhone 8 and X: Buy handset outright vs pay-monthly phone contract (UK)

For the past couple of years, I’ve preferred to have a SIM-only contract and to buy my iPhone direct from Apple for full price. The key advantage is that I’m not locked into a contract and it’s actually cheaper over time.

A SIM-only contract is basically the same as a pay monthly one but you’re not locked in for 24 months and you are just paying for the calls/data. Pay monthly contracts include calls/data plus a contribution towards the cost of a handset.

So, what are the costs and differences.

Taking the most expensive handset, which is the iPhone X (256gb) at £1149 and the cheapest of the new handsets, the iPhone 8 (64gb) at £699, I’ll walk you through the differences for the various UK providers so that you can see what the overall cost of the handset and line rental is over 24 months’ ownership. See further down for a breakdown and what they cover.

Vodafone – iPhone X: £1788 on contract or £1533 SIM-only
iPhone 8: £1326 on contract or £1083 SIM-only

O2 – iPhone X: £1870 on contract or £1533 SIM-only
iPhone 8: £1318 on contract or £1083 SIM-only

Three – iPhone X: £1951 on contract or £1461 SIM-only
iPhone 8: £1351 on contract or £1011 SIM-only

EE – iPhone X: £1982 on contract or £1653 SIM-only
iPhone 8: £1442 on contract or £1203 SIM-only

GiffGaff – iPhone X: £1509 SIM-only
iPhone 8: £1059 SIM-only

So, you basically save around £250 over the period of a 24 month contract (a little over £10 per month) and get the flexibility to move providers or cancel in the interim. Furthermore, you will have an unlocked handset as you buy directly from Apple. The only thing is that you have to lay out the full amount in advance.

The maths behind it and some extra notes…

Vodafone:
iPhone X: £300 upfront plus £62 per month for 24 month contract (4gb data)
iPhone 8: £30 upfront plus £54 per month for 24 month contract (4gb data)
SIM-only: £16 per month for 12 month contract (6gb data)

O2:
iPhone X: £70 upfront plus £75 per month for 24 month contract (5gb data)
iPhone 8: £70 upfront plus £52 per month for 24 month contract (5gb data)
SIM-only: £16 per month for 12 month contract (5gb data)

Three:
iPhone X: £79 upfront plus £78 per month for 24 month contract (4gb data)
iPhone 8: £79 upfront plus £53 per month for 24 month contract (4gb data)
SIM-only: £13 per month for 12 month contract (4gb data)

EE:
iPhone X: £230 upfront plus £73 per month for 24 month contract (15gb data)
iPhone 8: £50 upfront plus £58 per month for 24 month contract (8gb data)
SIM-only: £21 per month for 12 month contract (18gb data)

GiffGaff:
SIM-only: £15 per month for 30-day contract (6gb data and 1000 mins per month)

These numbers are based upon unlimited minutes/texts and data of around 4GB per month. If have done my best to compare ‘like with like’ (EE seem to have much larger data bundles). The difference in cost between 24 month contract and SIM only is similar for data bundles that are further up the scale. Costs came from provider websites on 1st November 2017.

SIM-only contracts come in 2 forms. You can either have a 30-day contract or a 12-month contract. The above savings are based upon the 12-month contract. You’ll need to add around £5 per month for 30-day contracts, but that still saves you around £125 over the life of your contract. The only exception to this is GiffGaff, who only do 30-day contracts.

VERDICT: You can save yourself around £250 over 24 months and have a more flexible contract by buying your handset directly from Apple and taking out a SIM-only contract. The cheapest SIM-only provider is Three and if you’re getting a contract, Vodafone are the cheapest.