Over-65s waste £87million a YEAR paying off mobile phones they already own

Pensioners are overpaying their mobile phone bills by up to £87million a year, as they continue putting money towards handsets they have already paid off. 

Most pensioners have spent more than a year unknowingly paying for handsets they already own, according to research from Virgin Media O2.

On average this costs affected retirees more than £170 per year, which for some is more than a week’s state pension payment.

The problem is that consumers are often unaware of how two parts of their mobile phone bill work – their device payments and the cost of airtime.

On hold: Many pensioners are paying more than they have to on their mobile phone bills

Some mobile phone firms bundle the two components together when someone signs up to a contract with a new phone included, while others charge them separately.

Neither is a problem until the device is paid off – normally within 12 to 24 months.

After that point, what happens depends on your deal. If you pay for your device and airtime separately, you are free to just pay the airtime, lowering your bill – or your provider may automatically shift you to an airtime-only tariff.

But if your tariff bundles together your device and airtime payments, you may be stuck paying for a handset you already own outright.

Older people are particularly at risk of falling foul of this, with one in five (21 per cent) unclear when their mobile phone contract ends, Virgin Media O2 said.

More than half (51 per cent) were also unaware of savings they could make by keeping their existing device and switching to a Sim-only deal at the end of their contract. 

Gareth Turpin, chief commercial officer at Virgin Media O2, said: ‘Many pensioners are at risk of paying over the odds for phones they already own because of opaque and confusing mobile contracts, with most unaware they are doing so. 

‘We urge anyone who is out of contract and thinks they might be overpaying for their phone to contact their provider, get the facts, and then take action by switching to a split contract or airtime only plan.’

Abigail Wood, chief executive of charity Age UK London, added: ‘When we talk about the cost of living the conversation is often fixed on heating and eating, but confusing utility bills are hugely problematic. 

‘Virgin Media O2’s research findings are alarming and shows the extent that over 65’s are losing out.’ 

Mobile phone users faced steep price increases of up to 17.3 per cent this year even on airtime-only deals.

A quirk of how many broadband and phone deals have worked since 2021 is that prices can be raised mid-contract.

Earlier this year Ofcom said consumers do not understand how these price increases work and that it may have to crack down on mobile and broadband price hikes.

However, Ofcom is not looking to make these deals cheaper – just to make sure that consumers understand how the pricing works.

How to save money on your mobile phone contract 

1) Work out what you REALLY need

These deals vary in terms of what you get and what you are charged. If you are at the end of your contract, or want to take out your first one, think about what you really need from a mobile phone deal.

If you have paid off your handset and are happy to keep it, check that you are not stuck overpaying a higher tariff than you need to.

Just like new: A refurbished phone can give you a top-notch gadget for a rock bottom price

2) Consider a sim-only deal

If you already own a mobile phone handset, or can get one cheaply, you may be able to save money with a cheap sim-only deal.

This is because most mobile phone contracts sell you two things – the phone and the cost of using it. If you already have the phone, you just have to worry about the cost of calls, texts and data.

Users will need to make sure they don’t exceed the data limits stated when they sign up. If they do, extra charges could apply – and these can be expensive.

3) Consider a refurbished phone

Instead of buying a brand new phone, see if there is a refurbished one that suits your needs. These are phones that have been overhauled by experts to replace broken parts and improve their operation.

They can work out considerably cheaper than new phones. For example, an iPhone 13 costs around £600 to £700 for a new handset, whereas refurbished models cost approximately £500.

These savings are even greater for less in-demand phones, or older models.

Most Samsung Galaxy phones released in the last five years normally cost no more than £200 when refurbished, for example, but cost up to four times that amount new.

4) Be prepared to haggle

As your existing contract comes to an end, haggling with your provider can save you money.

Do your research first, and come prepared with some of the best deals you have found elsewhere. Mention any issues you have had with your current provider, as this can give you an edge in any negotiations.

If you are not happy with whatever offer your provider makes you, say you are prepared to leave. This can lead to better deals miraculously appearing.

5) Be prepared to switch

If you cannot get a deal you are happy with from your current provider, consider switching away.

6) Check if you can get a social tariff

There are three social tariffs for mobile phone customers. Sim-only deals may work out cheaper, so even if you are eligible for a social tariff, make sure to look into those too.